(above: photo by Mary Rajkumar/Mint/Getty Images)
When the New York Times introduced its paywall in 2011, few people believed that readers would pay for the news online. Today, the newspaper has more than 1.6 million digital subscribers—a number that is growing rapidly in the aftermath of the 2016 US elections.
David Perpich (MBA 2007) oversaw the development of that groundbreaking paywall and has led the company in the development of successful new digital products such as NYT Cooking. Now we ask Perpich—named president and general manager of the Times’ new product recommendation site, The Wirecutter, earlier this year—what’s next for media companies?
Do you see hope for the local newspaper that is not the New York Times or the Wall Street Journal? Our country needs a healthy local news ecosystem, and we are losing local papers that engage in accountability journalism.
—Allegra Jordan (MBA 1995)
Local newspapers need to rethink what they are. Gone are the days of newspaper bundles where you cover all kinds of topics—some of which are now covered better in other places, whether it’s sports on ESPN or national and international news in larger media outlets—and gone are the days of substantial advertising revenue. But local newspapers provide important accountability, and the question is, how do you create a local newspaper that focuses on doing that?
Local newspapers need truly differentiated content that their communities care so much about that they are willing to provide some sort of compensation for it—through donations or subscriptions. That is the path forward.
How is social media changing the consumption of information and the consumer’s ability to access a diversity of ideas?
—Janet Simpson Benvenuti (MBA 1985)
Social media has transformed the way we get news: You have access to a wider diversity of ideas than you ever had before. But it’s up to the consumer whether to take advantage of that. Facebook and Twitter don’t cause the filter bubble—even though they provide the tools that make it easy for users to create a bubble. It’s an interesting question from a civic perspective, but I don’t think it is their responsibility as companies to fix it.
The WeChat social media platform in China is investing heavily in original journalism. It seems only a matter of time before Facebook and Google, which already have a stronghold on news dissemination, will start to produce original, high-quality journalism. If this were to happen, how will traditional media organizations continue to add value for their paying users?
—Ken Bridges (OPM 29, 2000)
I don’t think Facebook and Google are going to get into the news content creation business. Creating high-quality news content is an expensive endeavor and one that doesn’t scale that easily. These companies are platforms that can aggregate consumer demand and sell advertising against that. It’s in their interest to partner more closely with media companies. Figuring out how we coexist in a way that’s mutually beneficial is going to be one of the key questions moving forward.
When do you forecast the last printed edition of the New York Times rolling off the presses?
—Graham Lovelace (AMP 157, 1999)
Digital is the future, but that doesn’t mean print is going away. It’s not like going from CD to MP3, where the user experience is essentially the same. Reading a newspaper in print is very different from reading it digitally, and from a revenue perspective, print subscription revenue for the Times is relatively stable. Look at the book space. People predicted the demise of books with the advent of e-readers, but people are still buying printed books. Print isn’t going to disappear in the near future.
Why didn’t newspaper groups innovate more rapidly in the mid-1990s, particularly around classified advertising and search? And why aren’t publishers collaborating now to create lavish new forms of online display advertising?
—Graham Lovelace (AMP 157, 1999)
I don’t think newspapers realized that their product wasn’t just about news. Newspapers back then were a delivery vehicle for a lot of different information: news, classifieds, TV listings, ads, and coupons. They didn’t realize that there were new digital businesses to be built separately from the news bundle.
And even if they did realize it, digital was a very different business. It was more about technology than journalism or sales. If you saw that opportunity, it was really hard to get a new business off the ground.
Today, publishers are trying to create better forms of advertising. The Times has T Brand Studios and our advertising team here that has created bigger, more beautiful ads and better native content. But the reality is the advertising ecosystem is controlled by Facebook and Google. No amount of collaboration across news publishers is going to counteract that trend.
Class of MBA 2007, Section D