As the Web Grows, the New York Times Shrinks
Important Details: Circling the wagons to protect its core assets and values, the New York Times announced that it is closing a printing plant, cutting 250 more jobs, and reducing its page width by an inch and a half. Overall, the Times reported lackluster financial results, with profit steady but ad revenue growth up only 1 percent.
That inch and a half means a loss of about 11 percent of news space. Bill Keller, the Times’ executive editor, said the paper would add back some pages to make up about half the difference, creating more news digests (pointing to its Web site, no doubt) and editing more tightly.
What is unmistakable in the news is the rapid shrinking – literally and figuratively – of printed newspapers in the country. After all, we’ve seen cutbacks in overall staffing, newsroom staffing, and news space at papers large and small as circulation has dipped. But the Times and its national brethren – the Wall Street Journal and USA Today – have done better in print circulation than large metros, managing to stay largely flat. The Times announcement follows on the May news that the WSJ would reduce its page size as well.
That inch and a half is unusually important now, as newsprint prices continue to increase – up 7 percent to 8 percent – even as U.S. papers use less of it. Supply and demand, with demand rising quickly in China and India. Globalization at work.
The Times’ move is an acknowledgment that newspaper companies are quickly becoming news companies, reducing production-oriented capital and operating spending as fast as they can.
We’re now moving beyond a time of news companies talking about weathering a temporary storm. It’s the ability to publish that’s at stake. Keller’s words make that clear:
"It’s painful to watch an industry retrench…But this is a much less painful way to go about assuring our economic survival than cutting staff or closing foreign bureaus or retrenching our investigative reporting or diluting the Washington bureau."
In Outsell’s Opinion: The New York Times’ move is a loud ratification of the idea that the basic survival of news companies is at stake. This print-to-online transformation is an ungainly process. It forces news companies to maintain expensive legacy operations in that 95 percent of revenues are still tied to print. The Times’ move to reduce production costs and the physical costs of newsprint use is a sound one, one of the key essential actions we urged in our recent HotTopics, News Execs – Pressing Toward Transformation In Three To Five Years.
How it makes that move – how it better uses its print space and how its uses its Web site to engage readers of all ages – is the key. The Times’ move to put more basic stock listings online is just the beginning of what needs to be a march through the Times pages – deciding what’s best in print, what’s best online, and how the two interact with each other.
The irony is that, with staff and newsprint cutbacks, the Times will be producing less and less content at a time when Internet distribution makes more and more distribution possible. Newspapers’ share of the growing "contentosphere" is declining.