Newspapers leaders were probably amongst those who were happy to see the back of 2016. Print advertising began to collapse, and digital gains mostly flowed to Google and Facebook

To deal with the accelerating pace of change in the industry, the New York Times has released its third innovation report since 2014 urging the company to move even faster with its efforts to meet even more pronounced challenges.

In a sober admission, the report says: 

“For all the progress we have made, we still have not built a digital business large enough on its own to support a newsroom that can fulfill our ambitions.” 

This means that the company is going to outline cuts in the coming weeks, but as the Times has done in the past as it trims, it will bulk up its capacity and coverage in some areas.

As an outsider, I’m impressed. It’s an honest report that manages to address some long-standing issues, including the dull as dirt way journalists sometimes write stories we deem important. It was honest about progress that still needs to be made to grow the digital business. And I think the report manages to strike a balance between optimism and realism.

Print advertising collapses

First, it’s important to give the context of this report. The Times was going to release the report in November, but it was, by its own admission, caught off guard by Donald Trump’s presidential victory. Executive Editor Dean Baquet thought the newsroom had to be entirely focused on covering the historic election and its implications.

But more than the political context, the business context helps explain why the Times is cracking the whip to give the organisation an even greater sense of urgency. 

In 2016, print advertising hit the wall in the US. Reports from major newspapers like the New York Times and major newspaper groups such as McClatchy and Gannett saw double digit declines. Print advertising plummeted 19 percent in the third quarter at the Times, after a 14 percent drop in the second quarter. But they can be thankful they didn’t see the national print ad collapse like Gannett, which saw a 35.1 percent plunge. 

Added to the pain in print, publishers, including the Times, found it more difficult to grow their digital advertising business as Google and Facebook strengthened their duopoly. The Times saw a drop in digital ad revenue in the second quarter but managed to return to growth in the third. It’s not breaking news, but the severity of the decline in the US was stark.

A “subscription-first business” 

The report provides a good sense of how the Times plans to respond.

The Times stands apart as one of the few general-interest English language newspapers at which reader revenue is really starting to move the dial. Growing subscriptions and using that loyal reader base to grow premium advertising is the broad strategic goal in the report, which says: 

“We are not trying to maximize clicks and sell low-margin advertising against them. We are not trying to win a pageviews arms race. We believe that the more sound business strategy for The Times is to provide journalism so strong that several million people around the world are willing to pay for it.” 

The race for digital scale is over. Google and Facebook have won that race. 

For a number of publishers, digitally-driven reader revenue has plateaued, but like the stock market, the Times got a “Trump bump”. “In the third quarter of 2016, our digital subscriptions grew at the fastest pace since the launch of the pay model in 2011 — and growth then exceeded that pace during the fourth quarter, in a postelection surge,” the report says.

The entire report is driven by the premise that to continue to grow their subscription base and command premium prices for their advertising that the Times must continue to produce “Journalism that Stands Apart”, the title of the report. 

Cuts will focus on print transformation 

The report calls for the company to go even further in reducing the dominance of print on the ‘daily rhythms’ of the newsroom. The report’s authors said that the news desks were built to focus on print sections, which has meant that “high-priority coverage areas are spread across multiple desks, diluting them and limiting collaboration among”. 

The goal is to make both print and digital better, but it is clear that with the pressures on the print business, that the print operations will become smaller. 

In its own coverage of the report, the Times admitted that the report didn’t satisfy staff looking for certainty about the nature and the depth of the cuts, but it is clear that print will bear the brunt of the cuts to free up money for increased coverage of Donald Trump’s presidency and some digital expansion.

Times executives called for a ‘smaller and more focused newsroom’. Sections will be combined, and it is clear that to protect the reporting ranks, the Times is willing to sacrifice some of its line editing staff. As with so many newsrooms, the copy will be touched by fewer hands.

While their call to sharpen print while taking resources away from it will be familiar and a source of ridicule for many traditional journalists, there are specifics in the report on how the current newsroom structure could not only be made more efficient but actually restructured to produce shaper journalism.

Some content bores readers to death 

Up until this point in the disruption of print journalism, a lot of the call to change has been wildly contradictory. The message was often been some form of ‘let us boldly transform so we don’t have to change too much’.

Journalists didn’t, and many still don’t, want to confront the fact that doing what they have always done is not working.

From the start, this report tackles the cultural changes that will be necessary for the Times, and many other print-focused businesses, if they are to ever hope to rebuild their businesses for a digitally dominant age. The report says:

“We must differentiate between mission and tradition: what we do because it’s essential to our values and what we do because we’ve always done it.” 

And the report makes incredibly frank admissions about the difficulty some of the content the Times produces has in finding an audience. “We devote a large amount of resources to stories that relatively few people read,” the report says, but it goes further.

“The Times publishes about 200 pieces of journalism every day. This number typically includes some of the best work published anywhere. It also includes too many stories that lack significant impact or audience — that do not help make The Times a valuable destination.”

If a worthy piece of journalism lands on the internet and no one reads it, does it have any impact? No. I am going to quote at length because the specifics matter. Cynics in the industry will fill in the blanks if I don’t. 

“What kinds of stories? Incremental news stories that are little different from what can be found in the freely available competition. Features and columns with little urgency. Stories written in a dense, institutional language that fails to clarify important subjects and feels alien to younger readers. A long string of text, when a photograph, video or chart would be more eloquent.” 

I have been doing digital journalism since the mid-90s, and I’ve seen the stats for years. Some of the stories that we think are most important struggle the most to find an audience. It isn’t necessarily the topic but often the treatment. We have data and research that has shown us for years what isn’t working but because we think a topic so critical to the mission of journalism, tradition has trumped mission. We have to accept that our hidebound ways of telling and presenting stories have often meant that our most important journalism has been too often doomed to have the least impact. And as the last election shows, just because a story gets journalists’ pulse racing doesn’t mean it has any impact outside of our professional guild. 

The rise of visual journalism

The report highlighted how boringly written, institutional, incremental stories, fared the worst. They were “typically with minimal added context, without visuals and largely undifferentiated from the competition”, the report said.

And while the report is thin on some of the detail, the most detailed elements of it are about the changes needed in storytelling. The report could easily be dismissed if it spoke of cuts and improving quality while not providing detail about structurally and editorially to make those improvements.

The clearest call in the report was about the need to increase the digital focus of features content and add more visual creativity across the offering. You only have to look at this week when the Times released a fascinating, interactive and high-impact piece that spoke volumes about the gulf between public perception of the Obama years and reality.

Instead of drowning readers in acres of text weighed down with percentages, it was a much simpler, more visual and interactive look at President Obama’s legacy. I’d even call it playful, a word I don’t often use about public policy stories.

“You Draw It: What Got Better or Worse During Obama’s Presidency” was seven graphs asking you to use your cursor or finger, if you were on a touch device, to complete the graphs about the changes in unemployment, violent crime, national spending and the number of Mexicans living illegally under Obama. Then you found out how your perception matched reality. Brilliant. Simple. Engaging. Mobile. I found it actually worked better, at least more intuitively and fluidly, on my iPhone than the desktop.

The report calls for more investment in visual journalists and also more training and better tools so that more of the newsroom can plan and execute these types of projects.

Building loyalty through real engagement

Engagement is one of the most widely used, but most poorly understood, phrases in journalism. Damian Radcliffe explained why it has become so important recently, and as someone who has worked for much of the decade on various engagement projects, I would sum up the engagement imperative as this: We can’t build a business on millions of people who visit us once a month for less than 30 seconds. We can build a business by building the largest, most loyal audience possible who spend significant time with our journalism. 

The report puts it this way, “Perhaps nothing builds reader loyalty as much as engagement — the feeling of being part of a community.”

The Times realises that to build the subscription-led business that it believes is necessary to sustain its journalistic mission that it must find ways to deepen the relationship with its most loyal audiences and find ways to capture more value, more money, from them as that relationship develops. The report says:

“The Times experience doesn’t get more interesting or valuable as more of a reader’s friends, relatives and colleagues use it. That must change.” 

This isn’t fluffy, fuzzy thinking but a pretty traditional product strategy, and it is the basis for a lot of thinking that was part of the now mostly forgotten Web 2.0 revolution. Back then, one of the changes in thinking was around “network effects”, the idea that the best digital products improved the more people used them because use and user input made them richer and better. 

This report acknowledges that the Times isn’t taking full advantage of these network effects, and to address that, it calls for more collaboration between journalists and product leaders in the company. 

Tempered optimism

The Times has made progress in doubling its digital revenue by 2020, and the report was bullish about how the company had grown its digital subscription base.  As the Nieman Report says, this edition of the New York Times’ future gazing was lighter on “self-flagellation”

The report was honest about the need for more change, which isn’t easy with staff anxious about their futures, but the authors manage to temper the call for change with inspirational calls to the Times’ institutional values. 

It’s a good next step in the New York Times journey to transforming itself from an advertising-led business to a reader-revenue led one, and there are recommendations in the report that could be put to use in just about any media company grappling with the disruption we’re experiencing.