One Way to Phase Out Newspapers: Make Them a Luxury Good
The New York Times should make the print edition more expensive before switching to online only, BuzzFeed CEO Jonah Peretti says.
There will eventually come a day when The New York Times ceases to publish stories on newsprint. Exactly when that day will be is a matter of debate. "Sometime in the future, date TBD," the paper's publisher said back in 2010.
Nostalgia for ink on paper and the rustle of pages aside, there's plenty of incentive to ditch print. The infrastructure required to make a physical newspaper—printing presses, delivery trucks—isn't just expensive, it's exorbitant at a time when online-only competitors don't have the same set of financial constraints. Readers are migrating away from print anyway. And though print ad sales continue to dwarf their online and mobile counterparts, revenue from print is still declining.
A quick look at some key numbers for context: The Times' weekday circulation had fallen to about 649,000 at last count, according to SEC filings, while Sunday circulation was down to 1.2 million people. (Throughout the 1990s, weekday circulation was always above 1 million. In 1991, Sunday circulation approached 1.8 million.)
Overhead may be high and circulation may be lower, but rushing to eliminate the print edition of The New York Times would be a mistake, says BuzzFeed CEO Jonah Peretti.
BuzzFeed is one of the fastest growing media companies in the United States; it is digitally nimble and massively popular. And it's smart enough, strategically, to have gotten the attention of leaders at the Times. They identified BuzzFeed as a competitor last year in a lengthy innovation report—originally meant as an internal document at the Times, but leaked to, yes, BuzzFeed.
Peretti says the Times shouldn't waste time getting out of the print business, but only if they go about doing it the right way. "Figuring out a way to accelerate that transition would make sense for them," he told me, "but if you discontinue it, you're going to have your most loyal customers really upset with you."
Sometimes that's worth making a change anyway. Peretti gives the example of Netflix ramping down its DVD-mailing service to focus on streaming.* "It was seen as a blunder," he said. The move turned out to be prescient. And if Peretti were in charge at The New York Times? "I don't think I would pick a year [to end print]," he said. "I would raise prices and make it into more of a legacy product."
The most loyal customers would still get the product they favor, the idea goes, and they'd feel like they were helping sustain the quality of something they believe in. "So if you're overpaying for print, you could feel like you were helping," Peretti said. "Then increase it as a higher rate each year and essentially try to generate additional revenue." In other words, if you're going to make a print product, make it for the people who are already obsessed with it. Which may be what the Times is doing already. Getting the print edition seven days a week costs nearly $500 a year—more than twice as much as a digital-only subscription.
"It's a really hard thing to do and it's a tremendous luxury that BuzzFeed doesn't have a legacy business," Peretti told me. "But we're going to have questions like that where we have things we're doing that don't make sense when the market changes and the world changes. In those situations, it's better to be more aggressive than less aggressive."
* This article originally stated that Netflix no longer distributes DVDs by mail. Although the company appears to be phasing this service out, it still exists. We regret the error.