Should the NY Times go forward with its paywall? We think they should and here's our in-depth analysis. We analyze several companies in the field and the particular situation of the NY Times.

1. presents…
Prepared by
Jordhy Ledesma, Jenny Wang, Yi Yang and William Prescott

3. Agenda
• Industry Background
• Newspapers
• Media in general
• Scenarios
• Pros and cons
• Stakeholder perspectives
• Recommendations
• What Happened?
• Q&A

4. Newspaper Industry Background

5. Newspaper Readership
Read Newspapers Daily
Pre-1929
80%
60%
40%
Post-1960
1961-1977
20%
Post-1994 … at 9% by 2011?
1980
1985
1990
1995
2000
Sources: Robert Putnam, Bowling Alone, CBM
2005
2010

6. Newspaper Readership 2.0
Read Newspapers Daily
Pre-1929
The Great Depression
80%
60%
40%
Color TV,
Post-1960 VCRs
20%
And now… smartphones!
1980
1985
1990
1995
2000
Sources: Robert Putnam, Bowling Alone, CBM
2005
2010

7. Media Industry Background

8. Media Fragmentation, 1960’s to 2010’s

11. Scenarios

12. Possible Scenarios
• Scenario 1
• Keep the Paper and Remain Free for the Web
• Scenario 2
• Keep the Paper and Charge for the Web
• Scenario 3
• Ditch the Paper and Charge for the Web

13. How can The NY Times
Respond?
1.
Declining readership
2.
Exponentially increased competition
3.
Low-tech employees and contributors
4.
Problems across the board: in
news, travel guides, classifieds, sports
and editorials
5.
Loss of investor confidence
6.
Increasing paper and production costs
7.
Less and less advertisers

14. Scenario 1 – Do Nothing
Keep the Paper and Remain Free for the
Web
PROS
• Attract as many
readers as possible
• Waiting for a better
business model
• Retain existing paper
readers
• Keep
competitiveness to
other free news
channels
CONS
• High cost – bottom
line impact
• Lose first mover
advantage
• Decreasing financials

15. Scenario 2 - The Middle Way
Keep the Paper and Charge for the Web
PROS
• Accommodate new
way of reading
• Improve the
financials
• Expand to global
business
• Retain existing
consumers
CONS
• Pay for the web:
Challenge to change
consumer behavior
• Cannibalization of
readers and
advertisers
• Lose strategy and
resource focus

16. Rupert Murdoch on Paywalls, Print Media
and the iPad

17. Scenario 3 – All Digital
Ditch the Paper and Charge for the Web
PROS
• More people rely on
digital news sources
• Better advertising
data
• Wider potential
audience
• Better for the
environment
CONS
• Loss of paper only
readers
• Loss of public notice
advertisement
revenue
• Greater competition
in the digital arena

18. Jason Calacanis: NY Times vs Google

19. What Happened?

20. What Happened to the Financials?
http://markets.on.nytimes.com/research/stocks/tools/analysis_tools.asp

21. Paywall and R&D Changes

22. NY Times Research Labs

23. Conclusions
• We’re in the listening era for
newspapers. They need to listen to
customers, technologists and analysts
to adjust their business models
• Industry-wide efforts to change the most
likely scenario are required
• NY Times’ communication abilities are
critical to secure investor
goodwill, persuade competitors and
allies and engage customers

24. Q&A

25. References
• The U.S. Newspaper Industry in Transition
• Suzanne M. Kirchhoff
• Analyst in Industrial Organization and Business
• September 2010
• State of the Media 2010
• U.S. Audiences and Devices
• The Nielsen Company
• Exploiting the old while exploring the new: A
workshop on improving newspaper
performance
• John F. Greenman
• Alabama Press Association
• July 2008