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Scenario Analysis NY Times

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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.

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Scenario Analysis NY Times

  1. 1. presents… Prepared by Jordhy Ledesma, Jenny Wang, Yi Yang and William Prescott
  2. 2. Agenda • Industry Background • Newspapers • Media in general • Scenarios • Pros and cons • Stakeholder perspectives • Recommendations • What Happened? • Q&A
  3. 3. Newspaper Industry Background
  4. 4. 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
  5. 5. 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
  6. 6. Media Industry Background
  7. 7. Media Fragmentation, 1960’s to 2010’s
  8. 8. Scenarios
  9. 9. 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
  10. 10. 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
  11. 11. 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
  12. 12. 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
  13. 13. Rupert Murdoch on Paywalls, Print Media and the iPad
  14. 14. 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
  15. 15. Jason Calacanis: NY Times vs Google
  16. 16. What Happened?
  17. 17. What Happened to the Financials? http://markets.on.nytimes.com/research/stocks/tools/analysis_tools.asp
  18. 18. Paywall and R&D Changes
  19. 19. NY Times Research Labs
  20. 20. 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
  21. 21. Q&A
  22. 22. 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

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