Over the weekend, I watched Page One, a documentary which chronicles the turmoil occurring within the New York Times in 2009 and 2010 when newspapers were going out of business all over the country. Many wondered if the Times would also file for bankruptcy.
Three confluent factors spelled imminent demise for the newspaper: the Internet cannibalized subscription revenue, advertising dollars evaporated and news distribution was in upheaval on account of Wikileaks, Twitter, and blogs. The scale of these shifts was enormous: advertising revenue had crashed to 1950 levels, eliminating five decades of growth in just a few years.
Impressively, the New York Times has survived the crisis. Although the company’s value has declined by 75%, the Gray Lady generates about $1.3B in revenue and is profitable. 10% of revenues originate from digital subscriptions, evidence the paper is mastering a new art form - making money on the web.
Every company faces challenges in its history. The New York Times' struggle, depicted in this movie, highlighted some wonderful lessons on how to handle these crises.
First, the management of the company reaffirmed their core values. The editor, Tom Bodkin, spoke to his team pledging to maintain the top quality journalism and a commitment to truth the Times had always championed.
Second, the management team reduced its staff to a sustainable level. The anguish is plain to see both in employees and the management team, but it was essential to make these hard choices.
Third, Bodkin and his team embraced the transformation of the industry, pursuing technology advances and pushing the journalistic envelope, with the goal of restoring the brand of the Times as the vanguard of journalism.
In terms of technology, the company built an iPad application, hired a new group in the research and development team to focus on digital advertising products, and launched a content paywall. Each of these initiatives faced criticism
In terms of journalism, the Times adapted to new information sources and writers. The Times published Wikileaks documents supplied by Julian Assange, associating their old guard brand with a new form of activism/journalism - a very controversial move both internally and externally. In addition, the company hired a handful of young bloggers to incorporate a disruptive medium into their product. Since 2009, the NY Times has created more than 40 successful blogs.
These bold actions, which respected the core values of the company, saved the NYTimes from irrelevance.
The movie does present a very idealistic and one sided view of the company and the nuances of managing through a crisis like this are much more challenging than I may have made them appear in this summary, but the big blocks of strategy championed by the movie and undertaken by the management are worth highlighting.
By plunging the company into the new form of media, understanding the industry changes, and becoming agents of change themselves, the Timesmen were able to save the business during a great crisis, avoiding irrelevance and disruption by embracing innovation. Today, the NYTimes remains at the forefront of journalism and will for many years.