by Alan Levy
Seth Godin makes many relevant points in his recent blog post entitled “Watching the Times Struggle and What You Can Learn.” The marketing guru has come up with a series of innovative suggestions for The New York Times as they confront the most challenging environment in their history.
While there are no doubt many things the newspaper of record can do to stem its losses, can it be enough to offset the enormous structural gap between their online advertising revenues and their offline revenue model?
In my view, the answer is no.
In a recent article by The Times‘ own David Carr, David clearly explains that the revenue CPMs generated by nytimes.com is a fraction of the dollars generated by home delivery, advertisements in the actual paper and newsstand sales. He goes on to say, “Newspapers, which began the race with a huge lead in terms of human assets, may end up just another part of the under-informed commodity of clutter.”
This problem is not simply limited to The Times; it’s one that’s impacting most major newspaper and magazine.
Please consider this: I still have The Times delivered to my home in New Jersey each morning. In fact, I am changing my delivery service to weekend only, simply because I never open the newspaper during the week, though I do enjoy the experience of reading the Sunday edition. That being said, back when when I subscribed to home delivery of a daily paper, I had two choices: The Bergen Record and The Times. TWO CHOICES!
On the web, of course, I not only have hundreds (if not thousands) of responsible news outlets to consume much of the same content that appears in The Times, but I can read a more updated version of the paper for free from their site or via RSS – or even through my twitter alerts. Do I need to visit nytimes.com to read about Citibank’s recent bailout, or can I visit any number of world-class sites vying for my page view?
Again, newspapers have cannibalized their own base by offering the same content for free – and in a more timely manner – on their websites. Can they do anything different? Can they charge for this online content, much like The Wall Street Journal did prior to being acquired by Rupert Murdoch’s News Corp.?
The answer is of course no. But this is precisely why The Times will need a major structural change to survive. Today, online news is a commodity and The Times, The Journal and every other major publication will ultimately look at themselves in the mirror and completely change the way they report news.
There is no turning back.