Tuesday, September 06, 2011

Abramson faces toughest test of any NYT boss

Jill Abramson will have a tougher job than any of her predecessors when she becomes executive editor today of the New York Times, because she is being thrust into completely uncharted territory where she will have to choose between two irreconcilable paths.

She either will have to cannibalize the flagship print product to build the strongest possible digital franchise for the Times – OR – she will have to concentrate on sustaining the commercial strength of the print edition at the risk of channeling insufficient resources into assuring the strongest possible digital future for America’s newspaper of record.

Although it would be nice to have it both ways, that is not going to be possible in a time that resources are unlikely to increase – and, in the worst case, could shrink – at the most well-endowed newsroom in the land, where the editorial payroll tops 1,000 individuals.

The problem for Abramson is that the print and digital media demand significantly differentiated products, which the Times has not been able to produce to date with even its enviable strength. While the Times is formidably staffed to produce its estimable print edition, its digital business has not gotten the same resources and attention as the print product.

If the Times is to be as powerful a digital force in the future as it historically has been in print, it is going to have to create a plethora of highly differentiated and optimized web, mobile and social products that go beyond the current mission of previewing or recycling what appears in print, because there’s no reason to buy the print edition if you subscribe to any of its digital feeds. Further, as detailed in a moment, there’s reason to wonder about how many people will be willing to pay for its digital products.

If the existing editorial staff is cleaved to put more resources into creating highly optimized digital media, then the print report necessarily will suffer. If the paper continues concentrating on print, it likely will be out-maneuvered by digital competitors who are 100% focused on being successful in those media – and completely unabashed about aggregating content from the Times to achieve their goals, as Abramson’s predecessor, Bill Keller, noted in a widely discussed column earlier this year that oxpecked the Huffington Post for overzealous pursuit of the practice.

If unfavorable economic circumstances force cuts in the Times newsroom that are anything like those suffered at almost every other paper in the land (including its parent company’s publications in New England, the Southeast and California), the choices that Abramson faces will be starker – and more painful. But, make no mistake: The dilemma will persist even if Abramson keeps the cost-cutters at bay.

Abramson’s situation is not unlike that facing most publishers, who, on average, derive 90% of their revenues from the circulation and advertising sold in connection with their flagship print products. (The public affairs department at the NYT company failed to reply to calls and emails seeking the precise percentage of digital revenues at the Times but a bit of reverse engineering of the company’s financial statements finds that its entire publishing division derived 10.3% of its revenues from digital media in the second quarter of this year.)

With most demographic and commercial trends suggesting that print readership and advertising revenues will continue to decline as the Boomer generation rides into the sunset, newspapers today rely on the print product not only to keep the lights on but also to fund the innovation they hope will successfully transition their franchises to an increasingly digi-centric world.

But the stakes in this balancing act are higher for the NYT than most publishers because the growing success of its digital product – it is the top pure-play news site in ComScore rankings – could cut deeply into the sale of the print version of the national edition that is responsible for some 60% of the newspaper’s circulation.

The most recent audits show that total average circ for the Times is 916,911 on weekdays and 1.3 million on Sunday, meaning that 550,000 daily subscribers and 780,000 Sunday readers live out here in the hinterlands where it costs nearly $1,000 a year to buy the national print edition of the Times.

It’s a fair bet that the people who faithfully read the national print edition of the Times are not only thoughtful and wealthy but also increasingly comfortable with consuming news on such devices as computers, smart phones and iPads.

The more they doodle with the various digital incarnations of the Times, the faster the national readers will realize that nearly the all the news that fits in print is not only immediately at hand in pixels but also available before the presses even start to roll.

Out here on the Left Coast, I scan the stories in the next day’s NYT on my iPhone before I go to sleep. When I fish the fish-wrap edition out of the blue baggie on my doorstep in the morning, the news looks awfully old to me. Like most modern individuals who care about what’s happening in the world, I check NYTimes.Com and other sites throughout the day to catch up on the news.

So, why spend $1,015.56 a year for the print edition at full cover price plus 8.5% sales tax in San Francisco, when you can get the all-you-can-eat digital package for $455 a year?

Or, you can do what my 72-year-old brother in law does in Michigan. A distinguished and erudite lawyer who retired a few years ago as the head of a major Chicago firm, the first thing he used to do every morning – rain, sleet or snow be damned – was jump in his car to buy the New York Times.

Even though he managed to avoid using Dictaphones, Selectric typewriters, PCs and cell phones throughout his career, he got a Nook about a year ago, which he now uses for everything from reading books to surfing the web to doing Sudoku.

“I don’t have to buy the Times any more,” he says. “You can read 20 articles a month for free on their website and catch up with summaries of the rest on Huffington Post.”

If the New York Times could lose him as a paying customer, it could lose anyone.

That’s the challenge Abramson faces in her new job.


Blogger Mark Kolier said...

Add that two digital subscriptions of the NY Times is still less than one traditional print one. I guess my wife and I will then each have a tablet and now we can both do the Sunday Times Crossword Puzzle if we print it out...

2:28 PM  
Blogger mort levine said...

I don't disagree that managing any major newspaper organization today is a lot tougher than any predecessor. But must pick a bone with the notion that a lifelong faithful NYT reader can get by with 20 articles over a 30 day period read on his e-tablet. Relying on the HuffPost for NYT summaries is as skimpy a diet as is offered by our regional daily which always contains a dozen shriveled NYT stories. Allowing the print subscriber to gain gratis access to the digital version has the advantage of letting husband and wife to read major stories simultaneously if not earlier.---MORT LEVINE

12:00 AM  
Blogger Andre said...

I think not. Her job is definitely not to choose. Each customer will choose the distribution vehicle that works best for them. Abramson’s job is to make resource allocations that are in line with the revenue generated by each distribution platform. As long as online is captive to print the wrong business decisions will be made. One cannot allow the reporters tell the publisher how to run the business. The same can be said of producers and broadcasters. The dynamic is all around us in many industries and it cuts both ways.
In the case of the NYT and Abramson, she must allow print and online to compete as frenemies. Yes they can work together on projects and coverage as many news gathering organizations are now doing with competing news distribution organizations. But they must compete for the same consumer. Otherwise you are choosing a winner, which begs this question. Do you know what is best?
Traditional media including newspapers must recognize by now that their competition was not the paper or TV station across town but the internet ecosystem itself. Putting their content online for “promotional purposes” was dubious at best. It’s a platform competition. Every time a traditional content distributor allows their original content to be aggregated anywhere online without receiving adequate compensation it cuts into the traditional content distributor’s revenue stream.
If you are a content creator/distributor you must stop giving away your content for free. That is if you are engaged in business and not a hobby.
If this helps, think of enterprise reporting and content creation as one business and distribution as a separate business. Distribution could be print, radio, TV, online and whatever might come next. Adding value and realizing return on investment must occur at each step in the process. Otherwise you are choosing winners, marginalizing processes and selecting losers.
I think the real question is this. Is it too late to do anything about the current situation?
It is difficult to predict what the outcome might be, if traditional media decided to compete with their “captured” online platforms. But I would hazard this guess. There will be fewer but bigger media outlets with clear publicly stated points of view. Whether this is good for our democracy is an entirely different question.

11:54 AM  

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