Based

 on  Winter  Exam  2012/2013  

CASE:  THE  NEW  YORK  TIMES  

Clip  1-­‐  Business  Overview  (annual  report  2011  &  2007  and  Kumar  et  al.,  2012)  
The   New   York   Times   Company   is   a   leading   multimedia   news   and   information   company   that  
currently  includes  newspapers,  digital  businesses  and  investments  in  paper  mills.  The  company  is  
headquartered  in  New  York  City,  USA  and  employed  7,273  full-­‐time  equivalent  employees  by  the  
end  of  2011.  Its  business  is  based  on  two  segments,  the  News  Media  Group  and  the  About  Group,  
acquired   in   2005.   The   News   Media   Group   consists   of   the   following:   The   New   York   Times   (“The  
Times”),   the   International   Herald   Tribune,   NYTimes.com,   The   Boston   Globe,   the   Worcester  
Telegram   &   Gazette   and   related   businesses.   The   About   Group   consists   of   the   websites   of  
About.com,   ConsumerSearch.com,   CalorieCount.com   and   related   businesses.   In   January   2012,   the  
company  sold  its  Regional  Media  Group  consisting  of  16  regional  newspapers  for  US$143  million  in  
cash.  The  founding  family  (Sulzberger)  owns  20%  of  the  company  and  controls  70%  of  the  board.    

The   New   York   Times,   the   flagship   newspaper   of   the   company,   was   founded   on   September   18,  
1851.  By  2011,  the  newspaper  won  106  Pulitzer  Prizes,  the  most  of  any  news  organizations.  The  
Times  is  currently  printed  at  the  production  and  distribution  facility  in  College  Point,  N.Y.,  as  well  
as  under  contract  at  26  remote  print  sites  across  the  United  States.  It  is  delivered  to  newsstands  
and   retail   outlets   in   the   New   York   metropolitan   area   through   a   combination   of   third-­‐party  
wholesalers   and   the   company’s   own   drivers.   In   other   markets   in   the   United   States   and   Canada,  
The  Times  is  delivered  through  agreements  with  other  newspapers  and  third-­‐party  delivery  agents.  
Besides,   it   owns   some   of   the   websites   that   enjoy   strong   appeal   –   NYTimes.com   and  
global.nytimes.com.   According   to   industry   estimates,   in   December   2010,   NYTimes.com   reached  
32.4  million  unique  visitors  in  the  US  and  44.8  million  unique  visitors  worldwide.    

In  spite  of  prize-­‐winning  journalism,  The  Times  is  facing  significant  pressures.  Its  subscription  and  
revenues  had  steadily  declined  over  the  years.  Its  advertising  revenues  in  2011  were  down  by  over  
6%  compared  to  2010  ad  revenues,  and  in  spite  of  cost  cutting,  the  operating  profit  in  2011  was  
76%  less  than  a  year  ago.    Exhibit  1  presents  selected  financials  of  the  New  York  Times  Company:  
EXHIBIT  1  -­‐  FINANCIAL  HIGHLIGHTS  

  2011   2010   2009   2008   2007   2006   2005  

Total  Revenues   2,323     2,393   2,440   2,940   3,185   3,290   3,231  

Advertising   1,221   1,300   1,336   1,770   2,038   2,154   2,139  
Circulation   941   931   937   910   890   889   874  
Other   160   161   168   258   257   217   218  
Operating  Costs     2,093   2,137   2,308   2,783   2,919   2,987   2,902  
Income/Loss  before  Income   (4)   177   4   (72)   144   (552)   407  
Taxes  
Net  Income/Loss   (40)   108   20   (58)   209   (543)   253  
Employees  (full-­‐time  equivalent)   7,273   7,414   7,665   9,346   10,231   11,585   11,965  
(US$  million)    
Page  1  of  9  
 
Clip  2-­‐  A  Long  History  Abridged  (Encyclopædia  Britannica)    

The  Times  was  established  in  1851  as  a  penny  paper  that  would  avoid  sensationalism  and  report  
the   news   in   a   restrained   and   objective   fashion.   It   enjoyed   early   success   as   its   editors   set   a   pattern  
for  the  future  by  appealing  to  a  cultured,  intellectual  readership  instead  of  a  mass  audience.  But  
its   high   moral   tone   was   no   asset   in   the   heated   competition   of   other   papers   for   readers   in   New  
York   City.   Despite   price   increases,   The   Times   was   losing   US$1,000   a   week   when   Adolph   Simon  
Ochs  bought  it  in  1896.  

Ochs  built  The  Times  into  an  internationally  respected  daily.  Aided  by  an  editor  he  hired  away  from  
the   New   York   Sun,   Carr   Van   Anda,   Ochs   placed   greater   stress   than   ever   on   full   reporting   of   the  
news   of   the   day,   maintained   and   emphasized   existing   good   coverage   of   international   news,  
eliminated   fiction   from   the   paper,   added   a   Sunday   magazine   section,   and   reduced   the   paper’s  
newsstand   price   back   to   a   penny.   Later   in   the   1970s   the   paper,   under   Adolph   Ochs’s   grandson,  
Arthur  Ochs  Sulzberger,  introduced  sweeping  changes  in  the  organization  of  the  newspaper  and  its  
staff  and  brought  out  a  national  edition  transmitted  by  satellite  to  regional  printing  plants.  

The  Times  continued  to  utilize  technology  to  expand  its  circulation,  launching  an  online  edition  in  
1995  and  employing  color  photography  in  its  print  edition  in  1997.  The  publication  introduced  a  
subscription  service  called  TimesSelect  in  2005  and  charged  subscribers  for  access  to  portions  of  its  
online   edition,   but   the   program   was   discontinued   two   years   later,   and   all   news,   editorial   columns,  
and   much   of   its   archival   content   was   opened   to   the   public.   In   2006,   The   Times   launched   an  
electronic   version,   the   Times   Reader,   which   allowed   subscribers   to   download   the   current   print  
edition.   The   following   year   the   publication   relocated   to   the   newly   constructed   New   York   Times  
Building  in  Manhattan.  Soon  thereafter  it  began—like  many  industry  publications—to  struggle  to  
redefine  its  role  in  the  face  of  free  Internet  content.    
 

Clip  3-­‐  The  Newspaper  Industry  (Kumar  et  al.,  2012)  

The   New   York   Times   is   not   alone   in   feeling   the   pressure   from   the   digital   revolution   –   the   entire  
newspaper   industry   is   facing   significant   challenges.   Overall   circulation   in   the   industry   for   both  
weekday   and   weekend   newspaper   is   declining,   together   with   traditional   sources   of   newspaper  
revenues  (subscription,  retail  and  classified  advertising).  In  contrast,  most  of  the  costs  for  editorial  
staff,   production   and   distribution   are   fixed   and   have   very   little   room   for   reduction.   The   US  
newspaper   industry,   with   2009   annual   revenues   of   around   US$   35   billion,   is   highly   fragmented  
with   5,000   players.   However,   the   top   50   firms   accounts   for   over   three   quarters   of   the   industry  
revenue.  The  top  25  newspapers  ranged  from  national  newspapers  like  USA  Today  and  The  Wall  
Street  Journal  to  more  regionally  focused  dailies  like  The  Boston  Globe.  

Exhibit  2  shows  data  about  the  average  daily  circulation  of  the  top  10  US  Daily  newspapers.  

Page  2  of  9  
 
  
EXHIBIT  2  –  TOP  10  DAILY  NEWSPAPERS  IN  THE  US  BY  CIRCULATION  

Newspaper   Print   Digital   Total  Average   Total  Average   Change  

as  of  9/2012   as  of  9/2011   (2012-­‐2011)  
Wall  Street  Journal   1,499,204   794,594   2,293,798   2,096,169   9,4%  
USA  Today   1,627,526   86,307   1,713,833   1,784,242   -­‐3.9%  
New  York  Times   717,513   896,352   1,613,865   1,150,589   40.3%  
Los  Angeles  Times   454,498   151,577   606,075   572,998   11.9%  
New  York  Daily  News   383,835   146,605   530,440   605,677   -­‐11.5%  
San  Jose  Mercury  News   124,588   43,318   167,906   527,568   0.5%  
New  York  Post   344,755   178,113   522,868   512,067   2.1%  
Washington  Post   434,693   27,535   462,228   507,465   -­‐8.9  
Chicago  Sun-­‐Times   192,360   70,932   432,455   389,352   11.1%  
Denver  Post   226,118   176,446   412,669   353,115   16.9%  
Preliminary  Figures  as  Filed  with  the  Audit  Bureau  of  Circulations  
Accessed  at:  http://accessabc.wordpress.com/2012/10/30/the-­‐top-­‐u-­‐s-­‐newspapers-­‐for-­‐september-­‐2012/  (November  09,  2012)  

Digital  Disruption  (Kumar  et  al.,  2012)  

The   rise   of   the   Internet   brought   new   opportunities   and   challenges   for   the   newspaper   industry.  
While   the   Internet   posed   some   threats   to   newspapers,   it   also   offered   them   new   ways   to   reach  
their  audience.  Almost  all  the  major  newspapers  rushed  to  put  their  content  online  for  free  and  
the   industry   witnessed   a   tremendous   growth   in   online   traffic   of   readers.   This   new   source   of  
revenue   through   online   advertising,   however,   did   not   compensate   for   the   revenue   decline   from  
print.   Online   advertising   rates   for   newspapers   websites   were   significantly   lower   than   the   print  
advertising   rates   and,   by   2009,   online   advertising   revenue   was   only   8.2%   if   total   newspaper  
revenue.    

In   the   midst   of   the   online   trends   buffering   the   industry,   the   introduction   of   the   iPad   provided   a  
revolutionary   new   platform   to   consume   news.   There   was   huge   speculation   in   the   media   on   the  
effect  of  the  iPad,  with  diverging  opinions  on  whether  it  was  the  last  best  hope  for  an  old  media  
industry,  or  whether  it  would  merely  hasten  the  decline.  Director  Neisenholtz  joined  Steve  Jobs  on  
stage  to  present  a  Times  iPad  app  during  launch  (spring  2010),  saying:  “We’re  incredibly  psyched  
to  pioneer  the  next  generation  of  digital  journalism.  We  want  to  create  the  best  of  print  and  the  
best  of  digital,  all  rolled  up  into  one”.  

Competition  (annual  report,  2011)  

The   Times   compete   for   advertising   and   consumers   with   other   media,   including   paid   and   free  
newspapers,   websites,   digital   platforms   and   applications,   social   media,   broadcast,   satellite   and  
cable   television,   broadcast   and   satellite   radio,   magazines,   other   forms   of   media   and   direct  
marketing.  Competition  for  advertising  is  generally  based  upon  audience  levels  and  demographics,  
price,  service,  targeting  capabilities  and  advertising  results,  while  competition  for  circulation  and  
readership   is   generally   based   upon   platform,   format,   content,   quality,   service,   timeliness   and  
price.  The  Times  competes  for  advertising  and  circulation  primarily  with  national  newspapers  such  

Page  3  of  9  
 
as  The  Wall  Street  Journal  and  USA  Today;  newspapers  of  general  circulation  in  New  York  City  and  
its  suburbs;  other  daily  and  weekly  newspapers  and  television  stations  and  networks  in  markets  in  
which  The  Times  circulates;  and  some  national  news  and  lifestyle  magazines.  

Rising  costs  (Data  monitor,  2011)  

The   cost   of   newspaper   print   has   witnessed   steep   increases.   The   costs   of   raw   materials   for  
newspaper   ink   have   risen   by   the   end   of   2010.   According   to   industry   estimates,   naphthenic   oils’  
prices   increased   by   40%   while   the   price   of   carbon   black   increased   by   20%   within   seven   months  
from   October   2010.   The   increases   in   raw   material   costs   have   led   to   an   increase   in   the   prices   of  
newspaper   ink.   The   cost   of   raw   materials,   of   which   newsprint   is   the   major   component,  
represented  approximately  8%  of  The  Times’  total  operating  costs  in  2010.  
 

Clip  4-­‐  The  New  York  Times  Paywall  (annual  report  2011  and  Kumar  et  al.,  2012)  

In  March  2011,  The  Times  began  charging  consumers  for  content  provided  on  NYTimes.com  and  
other   digital   platforms,   in   addition   to   its   other   paid   subscription   offerings   on   several   e-­‐reader  
devices.  The  Times  implemented  a  metered  model  that  offers  users  free  access  to  a  set  number  of  
articles  per  month  (20)  and  then  charges  users  who  are  not  print  home-­‐delivery  subscribers  once  
they  exceed  that  number.  All  print  home-­‐delivery  subscribers  receive  free  digital  access.  

The  limit  of  20  articles  was  chosen  to  draw  in  subscription  revenue  from  the  most  loyal  readers  
who   saw   value   in   The   Times   content,   while   not   driving   away   casual   visitors   who   made   up   the   vast  
majority   of   the   site’s   traffic.   The   home   page   at   nytimes.com   and   all   section   fronts   were   free   to   all  
users  at  all  times,  whereas  for  the  iPhone  and  iPad  apps,  the  “top  news”  were  free  and  all  other  
content   was   placed   behind   the   paywall.   Since   the   cost   of   serving   more   content   to   an   additional  
user   was   minimal,   not   everyone   in   the   industry   agreed   with   the   idea   of   charging   based   on   the  
amount  of  content  consumed.  Raju  Narisetti,  managing  director  at  The  Washington  Post  disagreed  
with  this  approach,  tweeting:  “Don’t  penalize  engaged  readers  of  websites  with  a  paywall:  reward  
your   active   users”.   Jeff   Jarvis,   a   journalism   professor   and   a   media   expert,   went   even   further   by  
suggesting   a   “reverse   paywall”   where   the   more   active   users   would   see   their   charges   reduced   as   a  
reward  for  their  loyalty.  

In  addition  to  marketing  the  new  digital  platform  to  its  current  print  subscribers  (who  got  digital  
access   for   free)   and   lapsed   subscribers,   The   Times   also   partnered   with   the   auto   manufacturer  
Lincoln  to  provide  free  subscriptions  to  heavy  users  of  the  website  until  the  end  of  2011.  Lincoln  
aimed   to   reach   an   audience   that   would   help   the   company   built   its   brand,   and   it   expected   to  
execute  this  strategy  with  an  e-­‐mail  campaign  and  through  interstitial  ads  on  The  Times’  website.  
Although  Lincoln  would  not  pay  the  actual  subscription  costs  for  participating  readers,  valued  at  
US$150  per  reader,  the  company  was  expected  to  increase  its  online  ad  spending  with  The  Times.  

In   a   press   release   in   February   2012,   the   company   reported   390,000   paid   subscribers   to   its   new  
digital   initiative,   including   The   Times   and   The   International   Herald   Tribune.   In   addition   almost   70%  
of  the  print  subscribers  registered  for  digital  access,  which  was  free  with  their  print  subscription.  
 
Page  4  of  9  
 
Clip  5-­‐  The  New  York  Times  Continues  Global  Expansion  (company’s  website)  

The   New   York   Times   today   (Oct.   14,   2012)   announced   that   it   will   launch   an   online   Portuguese-­‐
language  edition  designed  to  bring  Times  journalism  to  Brazil  in  2013.  

The  new  web  edition  will  provide  Times-­‐quality  content  to  an  audience  in  Brazil  that  is  educated,  
affluent  and  connected  with  the  rest  of  the  world.  It  will  feature  English  to  Portuguese  translations  
of   the   best   of   The   Times’   award   winning   journalism   alongside   original   work   by   local   writers  
contributing  to  The  Times.  The  site  will  include  coverage  of  global  affairs,  business  and  culture  as  
well   as   other   subjects   of   particular   interest   to   the   Brazilian   reader.   The   Times   will   publish   30-­‐40  
articles   per   day   on   the   site   along   with   photography.   About   one   third   of   the   reporting   will   be  
original   content   designed   specifically   for   the   Brazil   site.   Graphics   and   multimedia   will   be  
introduced  over  time.  

Arthur  Sulzberger,  Jr.,  the  chairman  of  The  New  York  Times  Company  and  publisher  of  The  New  
York  Times,  said,  “Brazil  is  an  international  hub  for  business  that  boasts  a  robust  economy,  which  
has   brought   more   and   more   people   into   the   middle   class.   As   the   world   gets   smaller   and   digital  
technology  enables  us  to  reach  around  the  globe  to  attract  readers  with  an  interest  in  high  quality  
news,  Brazil  is  a  perfect  place  for  The  New  York  Times  to  take  the  next  step  in  expanding  our  global  
reach.”  

This  launch  is  a  part  of  The  Times’s  broader  imperative  to  expand  its  international  reach.  Earlier  
this   year,   The   Times   launched   a   beta   Chinese-­‐language   Web   site   (cn.nytimes.com)   which   has   seen  
rapid   adoption   by   readers   in   China.   It   will   officially   launch   next   month.   In   addition,   The   Times’  
News   Services   Division   transmits   articles,   graphics   and   photographs   to   more   than   1,400  
newspapers,   magazines   and   websites   in   nearly   100   countries   and   territories   worldwide.   The  
International   Herald   Tribune,   The   Times’   anchor   operation   outside   the   United   States,   celebrated  
its  125th  anniversary  in  October  2012.  
 

Clip  6-­‐  The  Times  in  the  Eyes  of  the  Media  

The  Future  of  The  New  York  Times  (extracted  from  Business  Week,  January  2005)  

Since   1896,   four   generations   of   the   Ochs-­‐Sulzberger   family   have   guided   The   New   York   Times  
through  wars,  recessions,  strikes,  and  innumerable  family  crises.  Yet  "Young  Arthur,"  as  he  is  still  
known   to   some   at   age   53,   exudes   a   wisecracking,   live-­‐wire   vitality   more   typical   of   a   founding  
entrepreneur   than   of   an   heir.   Arthur   Ochs   Sulzberger   Jr.,   who   succeeded   his   father   as   publisher   in  
1992  and  as  chairman  in  1997,  already  rescued  The  New  York  Times  from  decline  once.  With  the  
help  of  then-­‐CEO  Russell  T.  Lewis,  he  reinvented  the  "Gray  Lady  by  devising  a  radical  solution  to  
the  threat  of  eroding  circulation  that  had  imperiled  the  Times  and  other  big-­‐city  dailies  for  years.  
Sulzberger  changed  the  paper  itself  by  spending  big  money  to  add  new  sections  and  a  profusion  of  
color   illustration.   At   the   same   time,   he   made   The   Times   the   first—and   still   the   only   metro  
newspaper  in  America  to  broaden  its  distribution  beyond  its  home  city  to  encompass  the  entire  
country.   Today,   nearly   50%   of   all   subscribers   to   the   weekday   Times   live   somewhere   other   than  
Gotham.  
Page  5  of  9  
 
In  essence,  Sulzberger  is  doing  what  his  forebears  have  always  done:  sink  money  into  The  Times  in  
the   belief   that   quality   journalism   pays   in   the   long   run.   "The   challenge   is   to   remember   that   our  
history   is   to   invest   during   tough   times,"   he   says.   "And   when   those   times   turn—and   they   do,  
inevitably—we  will  be  well-­‐positioned  for  recovery."  In  effect,  the  Sulzbergers  have  subsidized  The  
Times  in  valuing  good  journalism  and  the  prestige  it  confers  over  profits  and  the  wealth  it  creates.  
In  fact,  for  much  of  its  history,  The  Times  barely  broke  even.  Recasting  the  paper  into  a  publicly  
held  corporation  capable  of  pursuing  profit  as  determinedly  as  Times  editors  chase  Pulitzers  was  
the  signal  achievement  of  Arthur  Jr.'s  father,  Arthur  O.  Still,  NYT  Co.  consistently  fails  to  post  the  
25%  profit  margins  of  such  big  newspaper  combines  mainly  because  of  The  Times'  outsize  editorial  
spending,  which  the  paper  does  not  disclose  but  which  is  thought  to  exceed  US$300  million  a  year.  
Like  other  old  media  families,  the  Sulzbergers  have  been  able  to  maintain  unquestioned  control  of  
their   company   by   creating   a   new   class   of   voting   stock   and   reserving   most   of   it   for   themselves.  
Among   them,   the   various   branches   of   the   Sulzberger   family   control   91%   of   the   class   B   voting  
shares.  

After  the  scandals  with  the  young  reporter  named  Jayson  Blair,  found  to  have  fabricated  dozens  of  
stories,  Sulzberger  appointed  Keller  as  the  new  executive  editor  in  July  2003.  "I  cringed  every  time  
I  read  that  people  thought  my  job  was  to  come  in  and  calm  the  place  down  because  it  made  me  
sound   like   the   official   dispenser   of   Zoloft,"   says   Keller,   whose   gracious   manner   has   often   been  
mistaken   for   passivity.   "I   saw   myself   instead   as   being,   in   some   sense,   a   change   agent   without  
having   to   wave   a   revolutionary   banner."   Keller   has   made   so   many   high-­‐level   personnel   changes  
that  two-­‐thirds  of  all  newsroom  workers  now  report  to  a  new  boss.  He  has  also  put  into  practice  a  
string  of  reforms  suggested  by  several  internal  committees  formed  in  the  wake  of  the  Blair  affair.  
These  include  the  appointment  of  a  standard  editor,  or  ombudsman.  By  most  accounts,  The  Times  
is  now  much  more  responsive  to  outside  complaints  and  criticisms  that  it  was.  

At  considerable  expense,  the  paper  also  redesigned  at  that  time  a  half-­‐dozen  of  its  sections  and  
upgraded  its  global  culture  coverage  with  the  addition  of  20  writing  and  editing  jobs.  "In  the  last  
year,  there  has  been  more  change  in  a  packed  period  of  time  than  I've  seen  at  this  paper  ever,"  
says   Sulzberger,   who   also   credits   Keller   with   "steadying   our   culture   and   lowering   the   temperature  
here."  It  is  no  mean  feat  to  simultaneously  improve  morale  and  shake  things  up,  but  Keller  is  going  
to   have   to   make   certain   that   a   happier   newsroom   does   not   again   make   for   a   more   complacent  
newsroom.  

The   Times   has   many   fewer   readers   outside   of   New   York   City   than   do   the   two   largest   national  
newspapers   —   USA   Today   and   The   Wall   Street   Journal   —   both   of   which   have   circulations   far   in  
excess  of  2  million.  "Those  two  papers  tend  to  be  a  more  cost  effective  buy  than  The  Times  just  
because  their  circulation  across  the  country  is  so  much  larger,"  says  Jeff  Piper,  vice-­‐president  and  
general   manager   of   Carat   Press,   a   big   media   buyer.   Besides,   the   reinvention   of   The   Times   as   a  
national  newspaper  has  been  accompanied  by  a  steady  loss  of  subscribers  in  the  New  York  metro  
area.    

Yet  its  ambitions  widened  to  encompass  the  globe  when  it  muscled  Washington  Post  Co.  aside  to  
gain   full   control   of   the   International   Herald   Tribune.   The   company   considered   making   the   Tribune  
over   into   a   foreign   edition   of   The   Times,   but   decided   in   the   end   to   maintain   its   separate,  
international   identity.   Actually,   the   Tribune's   240,000   subscribers   are   concentrated   in   Europe,   but  
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spread   among   180   countries.   Under   Golden,   a   slightly   older   first   cousin   of   Sulzberger's,   the  
Tribune   has   adopted   The   Times'   playbook,   if   not   its   name.   The   transatlantic   flow   of   copy   from   The  
Times  has  increased,  but  the  Tribune  has  enlarged  its  own  news  staff,  too.  It  has  also  added  pages,  
color  photos,  and  new  printing  sites  in  Sydney,  Sao  Paulo,  and  Kuwait  City.  It  scored  impressively  
in  recent  reader  surveys  in  Europe  and  Asia  and  ad  sales  are  rising,  but  they  still  amount  to  less  
than   US$100   million   a   year.   Even   if   the   Tribune   nourishes,   it   will   be   a   long   time   before   it  
contributes  significantly  to  its  parent  company's  top  or  bottom  lines.  

The   same   is   true   of   New   York   Company’s   investment   in   television   news.   The   Times   has   built   a  
cadre   of   television   professionals   who,   in   collaboration   with   a   revolving   cast   of   print   reporters,  
have  produced  much  fine  work  for  Frontline,  Nova  and  other  programs.  In  2003,  The  Times  moved  
beyond  production  into  distribution,  laying  out  US$100  million  for  half-­‐ownership  of  a  digital  cable  
channel.  Discovery  Times,  operated  in  partnership  with  Discovery  Communications  Inc.  

Today,  Sulzberger  faces  an  even  bigger  challenge  than  when  he  took  charge  of  The  Times  in  the  
mid-­‐1990s.   Can   he   find   a   way   to   rekindle   growth   while   preserving   the   primacy   of   The   Times'  
journalism?  The  answer  will  go  a  long  way  toward  determining  not  only  the  fate  of  America's  most  
important   newspaper,   but   also   whether   traditional,   reporting-­‐intensive   journalism   has   a   central  
place  in  the  digital  age.  

Encouraging  Social  Media  Innovation  at  New  York  Times  (extracted  from  Tactics,  June  2010)  

"I   don't   think   it's   accurate   to   call   newspapers   'newspapers'   anymore",   announced   Jennifer  
Preston,   the   first   social   media   editor   for   The   New   York   Times,   during   her   keynote   presentation   on  
May  7.  She  spoke  about  the  changing  media  landscape  and  the  paper's  multiple  platform  strategy.  
By   reaching   out   to   readers   on   their   terms,   the   paper   promotes   engagement   and   pulls   a   new  
audience   back   to   their   website.   The   Times   strives   to   push   content   through   any   platform—or  
device—that   users   want.   Preston   joked   with   the   audience,   saying,   "We   have   an   app   for   this,   an  
app  for  that,  and  one  of  our  apps  arrives  at  your  house  at  six  in  the  morning  in  a  blue  bag."  She  
emphasized   that   the   newspaper   encourages   innovation   and   seeks   to   catalyze   conversations  
around   their   stories.   She   referred   to   recreating   the   "dinner   table"   experience   for   users   who   are  
interacting   with   the   content.   "Storytelling   has   not   changed,"   Preston   said.   "What   social   media  
does   is   give   us   another   way   —   a   better   way—to   tell   those   stories   and   engage   readers   around  
them."  

The  paper  is  exploring  Twitter  as  a  way  to  engage  users.  For  example,  The  Times  live-­‐tweeted  the  
recent  Tony  nominations  because  live-­‐blogging  alone  was  "too  slow."  People  want  information  in  
real   time,   Preston   said.   This   demand   for   immediate   information   has   led   the   paper   to   work   with  
organizations  on  the  ground  when  and  where  a  story  is  breaking.  The  news  industry  has  evolved  to  
become   more   collaborative   as   reporters   from   different   outlets   work   together   to   provide   fast,  
relevant   updates.   The   news   Preston   cited   the   shooting   tragedy   at   Fort   Hood   as   one   of   the   first  
instances   of   Twitter   being   used   for   this   purpose.   The   Tïmes   created   Twitter   lists   for   users   to  
receive   instant   updates   from   organizations   such   as   the   American   Red   Cross   and   aggregated  
eyewitness  accounts.    

This   story   also   illustrated   how   the   flow   of   information   has   changed   with   the   proliferation   of   social  
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media.  "One  of  the  things  we're  committed  to  is  the  importance  of  being  open,"  Preston  added  
that   going   forward,   Facebook   is   a   priority.   She   views   the   platform   as   a   tool   for   distributing  
content,  allowing  loyalists  to  share  and  recommend  stories  with  new  readers.  "While  geo-­‐location  
is  the  new  cool  thing,  it  is  impossible  to  ignore  the  scale  here,"  she  said.  

All  the  News  that’s  Fit  for  You  (extracted  from  Communications  of  the  ACM,  June  2011)  

Delivering   personalized   news   poses   much   harder   problems   than   delivering   personalized  
recommendations   of   books   and   movies   as   Amazon   and   Netflix   do.   Yet,   despite   the   difficulties,  
personalized   news   seems   all   the   rage   these   days.   In   February   alone,   The   New   York   Times,   The  
Washington  Post,  and  Yahoo!  all  announced  some  form  of  automatic  personalization,  and  Google  
is  quietly  running  its  own  experiments  in  personalized  news  delivery.  

Joshua   Benton,   who   directs   Harvard   University’s   Nieman   Journalism   Lab   agrees   that  
personalization  offers  enormous  business  potential.  “The  New  York  Times  has  well  over  a  decade  
of   data   about   what   stories   I’ve   read,   how   many   seconds   I’ve   spent   on   each   story,   and   what  
sections   I’ve   read,   so   you   would   think   they   would   be   able   to   tailor   my   experience   in   a   way   that  
would   be   more   pleasing   to   me,”   Benton   says.   “As   a   result,   the   page   becomes   a   more   valuable  
piece   of   property   to   an   advertiser.”   Regardless   of   how   The   Times’   paywall   pays   out,   more  
advertising   revenue   would   be   particularly   welcome   in   an   industry   whose   sharply   declining   print  
circulations  have  led  to  decreases  in  ad  sales  and,  in  many  cases,  the  death  of  entire  newspapers.  

The   solution   at   The   New   York   Times   has   been   a   hybrid   approach.   The   site   is   supplementing   its  
home   page,   with   its   standard   mix   of   editor-­‐selected   content,   with   its   recently   introduced  
recommendations   page,   which   shows   a   ranked   list   of   stories   each   logged-­‐in   user   might   find  
interesting  based  on  his  or  her  reading  history.  Industry  analyst  Ken  Doctor,  a  veteran  journalist  
and   the   author   of   Newsonomics,   says   most   newspapers’   inertia   stems   in   part   from   a   lack   of  
expertise.  The  New  York  Times,  with  its  deeper  resources,  is  showing  itself  to  be  an  exception;  but  
even  so,  its  foray  into  automated  personalization  is  still  rudimentary.  The  technical  obstacles  are  
monumental—  from  the  scalability  challenges  of  combing  through  terabytes  of  daily  click  logs  on  
thousands  of  servers  worldwide  to  the  difficulty  of  learning  from  nearly  real-­‐time  feedback.  
 
 
Sources  
Data  Monitor.  The  New  York  Times  Company.  URL:  www.datamonitor.com  (acessed  on  
November  2,  2012)  
Encyclopædia  Britannica.  The  New  York  Times.  URL:  
http://www.britannica.com/EBchecked/topic/412546/The-­‐New-­‐York-­‐Times  (acessed  on  
November  2,  2012)  
Kumar,  V.;  Anand,  B.;  Gupta,  S.;  Oberholzeer-­‐Gee,  F.  (2012).  The  New  York  Times  Paywall.  
Harvard  Business  School  Case  9-­‐512-­‐077  
New  York  Times  Company  (2012) The  New  York  Times  Continues  Global  Expansion  with  Plans  
to  Launch  Web  Site  for  Readers  in  Brazil.  URL:  http://phx.corporate-­‐
ir.net/phoenix.zhtml?c=105317&p=irol-­‐press  (accessed  on  November  9,  2012)  
   

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QUESTIONS  
Tutorial  2  
 
1. What   has   been   The   New   York   Times’   strategy   to   cope   with   the   market   and   technological  
changes   of   the   last   fifteen   years?   Explain   how   the   company   reacted   to   these   changes   as   to  
maintain  its  market  position  and  sustain  its  competitive  advantage.    
 
2. Undertake  an  analysis  of  at  least  two  strategic  capabilities  (resources  and/or  competences)  
of   The   New   York   Times   using   the   criteria   of   (a)   value,   (b)   rarity,   (c)   inimitability   and   (d)  
organizational  support.  
 
3. Identify   two   strategic   capabilities   (you   are   allowed   to   use   the   same   one   you   identified  
when  answering  question  two)  that  have  been  the  basis  of  the  competitive  advantage  of  
The  New  York  Times.  Explain  how  their  importance  has  evolved  over  time.  How  can  they  be  
related  to  the  concept  of  dynamic  capabilities?  
 
 
Tutorial  3  
 
1. On   the   basis   of   Porter’s   five   forces   framework,   analyse   the   market   The   New   York   Times  
operates  in.  What  do  you  conclude  about  its  attractiveness?  (NOTE:  Be  specific  about  the  
market  definition)    
 
2. Drawing   on   the   information   provided   in   the   case,   use   the   Key   Factors   for   Success   (KFS)  
framework   to   analyze   this   industry   and   derive   its   essential   drivers   of   competitive  
advantage.  
 
3. According   to   the   data   provided   in   the   case,   at   which   stage   of   the   industry   life   cycle   (ILC)  
would   you   position   the   newspaper   industry   and   why?   Assess   the   strengths   and   the  
limitations  of  the  ILC  tool  for  the  analysis  of  this  industry.  
 

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