Tor-Bøe Lillegraven: You are not the NY Times

In Beijing most of August, I’ve found the Chinese Internet censorship takes a little getting used to (writes Tor-Bøe Lillegraven).

I´m not really missing my social media fixes, but I miss some of my favorite news providers, such as The New York Times or Dagbladet In Norway.

Yesterday, I did however get some NY Times news by proxy – I finally got around to update myself on their financial results from Q2 2013. (Disclaimer: The NYT is a client of CCI Europe, where I head the business consulting unit.)

While advertising and other revenues are down by 5.8 per cent and 9.7  per cent respectively, the most notable news was that circulation revenues increased 5.1 per cent - driven by digital subscriptions:

From the August 1st press release: “Paid digital subscriptions across the Company totaled approximately 738,000 at quarter-end, an increase of nearly 40 percent year-over-year from the end of the second quarter of 2012.”

Pundits responded immediately – noting how the New York Times pay wall success-story means that no one ever needs to worry about the future of journalism again. Now, there is no arguing NYT are doing a great job at expanding their brand beyond the traditional newspaper.

It is understandable that everyone is looking to market leaders such as the NY Times for clues as to how to transform their own newspaper to a digital success. 

But please keep in mind: You are not the New York Times!

The New York Times is not saving anyone but themselves.

Paywall dreamers should keep in mind that the NYT have been at it for years, learning by trial and error. Their first attempts at closing off online access was no success, closing down in 2007.

My work brings me in contact with newspaper companies all over the world – and these days, it seems there is one question that is on every executive meeting agenda: should we put up a pay wall like the NY Times?

This is probably the wrong question to ask. The right question to ask is:

What specific growth areas have the NY Times been investing in, that now enables them to monetize their content and put up a paywall without selling out on core values?

Arthur Sulzberger, chief executive and chairman of The New York Times Company, revealed the answer during his keynote at DME last year:

–   Mobile offerings

o  NY Times use the mobile platforms to help re-imagine their approach to news, considering phones and tablets as they plan coverage, rather than thinking of them as something that is just somewhere downstream from online.

–   Social media

o  400+ Times journalists are active on Twitter, with more than 2.5 million fans on the Times Facebook pages. In a world overflowing with information and opinion of too often questionable value, NYT want to provide context and reliability.

–   Global reach

o  By 2012, 12 per cent of NYT digital subscribers live outside the United States. iPhone traffic comes first- and-foremost from the U.S., but is followed by China, Canada, South Korea and Japan.

–   Video

o  Video is a major growth area in online advertising. The inclusion of video, interactive graphics and other multimedia tools is a critical piece of the re-imagining of newspapers as true multi-platform news organizations serving the needs of an always-on consumer. (Note: New CEO from BBC will help make that happen.)

Here is what Sulzberger had to say about the NYT paywall success:

“We launched the digital subscription effort because we needed to advance our business model in ways that allowed us to maintain our influence on the Web, expand our unique mobile offerings, and protect and grow our advertising business, all the while building a new subscription business.

We knew that readers placed a high value on our journalism, and we anticipated they would respond positively to our digital subscription packages. And we now have incredible data about our audience that we can use to drive the development of new products.

“We have started to do this at The Times, and we will never look back. Going forward, our priority is to innovate and experiment, learn more, and continue to change how things are done.

“But beyond these business initiatives and technological challenges, we must remember what is at our core.

“We’re in the news business and the primary role we play in society is to report the facts and present an accurate view of the world. For this to be possible we must have a trusted relationship with our readers – as well as the people we cover and the society we serve.”

So even if most newspapers are not the New York Times, there is still at least one important lesson to be learned: The key to the NY Times success story is their strong relationship with the public they serve. The paywall is really just a sidenote.

Sure, the 738,000 new digital-only readers will bring in more money, but much more importantly – they will help the NYT move forward with new digital products and services, building new relationships and cementing old ones.

As Sulzberger said: the future of digital media is not about forcing your audience to choose one platform over another.

So maybe the right question for news publishers to ask is: Will we better serve our public by putting up a pay wall around our online content?

PS: The NY Times has actually been tracking my online readership for more than 15 years. I first became a registered user when I went to college in San Diego in the late 1990s. Paywalls are also quite the buzz in Asia, with editors casting an envious eye at media groups who have successfully implemented “paywalls” after years of giving away news for free.

• Tor-Bøe Lillegraven is business consulting vice president at CCI