Widely revered as the ‘gold standard’ of print journalism, not even the august New York Times (NYSE: NYT) can escape harsh economic realities. Falling ad revenues and subscription rates, as well as increased competition from online outlets, have forced the ‘Grey Lady’ to announce another round of buyouts and possible job reductions – the third such similar measure over the past four years.
International Business Times spoke to a media expert to discuss the New York Times’ current problems and how it may cope with a cloudy future.
Dr. Lance Strate is professor of communication and media studies and director of the professional studies in new media program at Fordham University in New York City.
IB TIMES: The New York Times is suffering from the same troubles as other print newspapers – falling ad revenues and dwindling subscribers. But have they not compensated for these shortcomings through paid digital subscriptions? Why are ad revenues falling? Is it due to the still-fragile economy? Or is it because advertisers want to put their money on online news outlets?
STRATE: Newspapers, by and large, were barely getting by, just hanging on, before the economic downturn, so the fragile economy is not the major cause of newspapers going under, but rather simply exposed their precarious financial situation, and sped up the process of their demise.
Newspapers lost a major source of income some time ago when what used to be called ‘classified advertising’ shifted over to the internet, so that people who want to buy and sell goods and services go to sites like Craigslist and eBay, and job openings are listed on sites like Monster.com. Further erosion of revenue came from the shift of local advertising to sites like Facebook, and through offers like Groupon. Online advertising has a major advantage over print and broadcast in that they can tell advertisers exactly how many people click on an ad, and how many clicks result in purchases, whereas mass media ads cannot provide that kind of feedback, nor can they deliver target audiences with the specificity of online media.
For example, a Facebook ad can be directed based on a variety of demographics, including location, age, gender, etc.
IB TIMES: But even digital advertising is falling for the Times. Why is this, when presumably more people are accessing the paper on their mobile units?
STRATE: Newspapers came late to the game online, and are still struggling to figure out how to monetize their offerings, and mobile presents new challenges that even successful online sites like Facebook have had problems with, which was why shares in Facebook immediately dropped in value right after its initial public offering.
And there is so much competition from so many sources now. When in the past did the New York Times have to compete with CNN, the BBC, the Huffington Post, or any number of prominent independent bloggers?
IB TIMES: Have other major newspapers across the U.S. been laying off employees and offering buyouts to managers as the Times has?
STRATE: Absolutely! It's the only alternative to going out of business completely. And of course, the result is a steep decline in the quality of journalism that the newspapers can provide, which, in turn, lowers their value to readers, so it's a self-reinforcing downward spiral.
IB TIMES: From my perspective, the Times seems to cater to well-educated, upper middle class (or wealthy) urban liberals. When I ride the subway, I never see blue-collar people (regardless of race) reading the Times. Am I wrong in this assessment?
STRATE: No, you are correct. In the New York metropolitan area, the New York Daily News and the New York Post have long been the papers with mass appeal, and the Daily News at least has traditionally outsold the Times.
The Times does have a national following, however, and is considered the top newspaper in the United States, followed by the Washington Post, and it has subscribers all around the country, and abroad.
The Times provides a common forum for the political, economic, and social elites of this nation -- what other paper carries news of society weddings, ads for mansions and multimillion dollar luxury apartments, and op-ed pieces by the leading intellectuals and most powerful individuals of the world?
IB TIMES: Do the New York Post and New York Daily News cater to readers that the Times either does not want or whom they alienate?
STRATE: I don't think the Times has sought to reject those readers. If anything, they would like them to move up to the Times, and the newspaper has had a very active, aggressive program to get schools to use the paper in classes, providing low-cost subscription rates for educators and students, from grade school to university level.
I remember having to read the Times in elementary school for a period of time, and the teacher even taught us how to do the straphanger fold used by subway and bus riders to manage the paper, along with understanding how the right-hand column was the top story, followed by the left-hand column, and so on.
So their goal would be to educate and elevate, but unfortunately this runs counter to the trend where people increasingly have been turning to television for their news, and broadcast journalism has largely shed the stigma it once held of being a degraded form that did not go beyond the surface of the headlines.
For readers brought up on television, the tabloid papers like the Post and News, and USA Today for that matter, more closely resemble what they're habituated to, and that carries over into the online environment.
IB TIMES: The Times frequently features very esoteric subjects – reviews of obscure books, travelogues to exotic lands most people cannot afford to go to. Does this add to its image as an “elitist” and “out of touch” paper?
STRATE: Absolutely. It indicates that they are in many ways concerned with readers who are not part of the 47 percent that Mitt Romney wrote off, or to some extent, the 99 percent that the Occupy Movement refer to.
IB TIMES: How does the demography for the Times differ from that of the Wall Street Journal?
STRATE: The Wall Street Journal is more specialized in its focus on business and finance, and most of all much more conservative and Republican, whereas the Times is liberal and Democratic in orientation, and does aim for a wider audience, one that includes intellectuals. To use an old-fashioned term, you might say that the Times is written for the ‘intelligentsia,’ the class of people who form the intellectual elite, a group that tends to be more left-leaning than others, just as the economic elite typically leans to the right.
IB TIMES: Would the Times be better served by getting rid of the print product and becoming purely digital? Or would that entail other risks?
STRATE: Look at it this way, newspapers were printed on cheap paper that was not meant to be at all durable, but rather to be thrown away, or, in the old days, to be used as fish wrap.
And that still has some utility if you're trying to break in a new dog, for example. But ultimately, there is no need for pulp-type print media anymore, because electronic text does the job cheaper and easier, and with less waste. So the only thing keeping the Times on paper right now are older readers who don’t go online or don't want to read the news in a digital format, or are just in the habit of reading the daily paper in paper form.
And there always will be some who are traditionalists, laggards (not that I blame them, mind you), or nostalgic, but in the end the economies of production and distribution will simply make printing of ephemeral media unfeasible.
The Times may actually be one of the last to eliminate their print edition, and may continue to produce a limited supply as a specialty item, but given the high quality of e-readers today, and their continued improvement, there will be no alternative to going purely digital, and in the end it will be their best hope of retaining significant advertising revenue.
IB TIMES: Critics of the Times have long complained that the paper is too “liberal” and “out of touch.” Could they increase readership if their editorials moved more to the center?
STRATE: Traditionally, newspapers have kept a sharp distinction between the editorial page and objective news reports, and the Times does provide a variety of views on their Op-Ed page.
But I do think they have alienated some readers with their reporting, because there are choices that they make about what to report on, what emphasis to give it, where to place it, etc. And at this point, I don't think they can afford to lose any more readers, so responding to criticism and doing all they can to avoid the perception of being overly liberal would probably be in their best interests.
Having said that, the fact that the Times is a liberal paper is a part of its identity, and it could hurt them to abandon that altogether, so what they probably need to do is aim towards a Democratic centrist position.
IB TIMES: In the 1940s and 1950s, New York City had something like seven or eight daily papers. How on earth did they co-exist and survive?
STRATE: Simple, no competition.
Actually, radio was the first medium to challenge newspapers, and cut into their revenues. But even with radio, most people turned to newspapers to be informed, but also to be entertained by reading the sports pages, the comics, etc. Newspapers were inexpensive, making their profits mainly through advertising rather than the purchase price of copies and subscriptions.
And papers also had multiple editions through the day, so, for example, you might read the Times in the morning, and pick up the Post in the afternoon. It is hard to imagine today, but without Smartphones, the internet, and even television, people had a great deal more time on their hands, and newspapers were a way to fill that time, including filling in the blanks on Crossword puzzles, Daily Jumbles, and the like.
As television became the dominant medium by the end of the 1950s, local stations, and networks, claimed increasingly more advertising revenues, which increasingly sent more newspapers out of business.
Indeed, before the emergence of TV, every decent-sized city had multiple, competing papers, and the public was much better for it. You might even say that as newspapers disappear, the reading public that went along with it disappears as well, and as the reading public disappears, so too do newspapers. They are interdependent parts of the media ecosystem, and we are left with a society in which there no longer is any real understanding of what a "public" is or what is meant by the term, and without a public there can be no real sense of what it means to be private either.
Palash has worked as a business journalist for 21 years in New York.