Apple Vs. The New York Times
Apple and Google are making money. Conde Nast and The New York Times are barely breaking even. What gives? Personally, I think the issue is that Apple and Google sell me an experience, they make my life easier. The other guys just sell content.
People, however, never paid for content. Homer wrote the Odyssey for meals and a place to crash. Shakespeare became a prosperous land owner, but he never saw any bank from the Leonardo DiCaprio flick. The money is in the medium. Someone technical always comes into exploit the artist, and what they really sell is some medium. It’s a product, and the geeks selling the widgets make the real money.
The issue isn’t that the content is bad. It’s just that the old media product isn’t as good as, say, Apple or Google. Those are both ‘content’ businesses, but Apple’s sexy iWants and Google’s supercomputers are both much better products. A magazine or newspaper is a rich experience, but it’s not the best content delivery system. Which, if you want to be a content business, is the point.
This is not to say that newspapers or magazines are deprecated, like records. Or maybe they will be. Vinyl sales are growing and it’s quite a comfortable niche. It doesn’t really matter. The New York Times has 17.4 million readers per month online compared to 1.1 million subscribers (huge, basically opposite caveat). If they just released an innovative product around their content I’d buy it. Perhaps a pill that gives informative seizures every 3 hours, something new. If they have all those eyeballs they could push their classifieds section harder and sell ad space more aggressively, all through investments in technology.
Print still makes real money, but they should be smart about it. They need to move into India and China where there is growing demand for print. And not the vanilla International Herald Tribune, but real regional reporting. South America, Africa, those markets are still wide open and can be very profitable. Hell, a Mexican telecom tycoon is the one bailing the NYT out. The success of Al Jazeera shows that there’s still huge demand for news, but people don’t need to get it live from New York anymore.
Google and Apple are making investments and trying new markets and the media boys aren’t. I think that’s basically the difference. Content isn’t a tax and blaming the ungrateful consumer doesn’t make money. You have to improve the product. These guys are all in the content business. Google and Apple just package it better. All I’m saying is you wouldn’t wrap your fish in an iPhone. That’s basically where the business is right now.
NYT has way too much overhead compared to their output. I like what Michael Arrington suggests: NYT still has excellent journalists, they should keep the best ones, and focus more on going online. They cut down on millions in overhead while still bringing out the best stories in a form that is becoming more and more popular. Look at TechCrunch, they are hugely popular as a Tech blog, and look at AOL as a news source, they keep grabbing great journalists where ever they find them.
did you read the report done by a 15 year old intern at Morgan Stanley that outlines how an average teenager in the UK thinks of media – i think it had heads spinning in the City and Wall St. Check out http://www.guardian.co.uk/business/2009/jul/13/teenage-media-habits-morgan-stanley