The media industry is advancing, just as technology is advancing. It could be perhaps the most disrupted industry by digitization. In the 19th century and early 20th century, print media companies such as the New York Times were well known for producing and distributing hard copy newspapers in America. Today, digital migration has changed how people access information, and thus, the company has changed its business models. The emergence of social media platforms, websites, and blogs have posed stiff competition to print media. Besides the media industry, many other sectors such as business, agriculture, and technical fields have transformed into digital operations with the advance in technology.
New York Times transited into digital operations in 2011. It decided to change after losing a significant number of audience due to digitization. The change was managed by hiring technical staff and a consulting firm, which facilitated the change effectively. This paper looks into the New York Times’ process of change. It contains an analysis of why the company decided to change to digital operations, how it was done, whether it was effective, and how digitization influenced its success.
Brief Information on the New York Times
The New York Times is part of a print and publishing media industry based in New York City – New York State in America. Founded in 1851, the newspaper has been operating for over 167 years and has had a great legacy, both in America and worldwide. It has won 130 Pulitzer Prizes, more than any other globally. It is a typical newspaper with editorials, opinions, business, arts, sports, science, travels, and other feature news. It produces its contents in English as the primary language and Spanish and Chinese as sublanguages.
Need for Change
Before digitization, people were only interested in print newspapers and magazines as the mainstream source of news. However, today, the majority have shifted attention to their digital gadgets such as phones and computers. Digitization has been killing the print media slowly and consistently. According to The Atlantic, “Between 2000 and 2015, print newspaper advertising revenue fell from about $60 billion to about $20 billion, wiping out the gains of the previous 50 years” (Albanese, 2018). Considering that the newspaper mainly depended on advertising as a revenue source, the revenue falling means a dead-end for the newspaper media. However, the New York Times was one of the few newspapers that managed the turbulent by shifting from analog to digital. It perceived the adverse impacts of resisting a change to digital media. It decided to embrace digital and continue delivering the same high-quality content they had been trusted with for 160 years.
The PESTLE model will be applied to provide a detailed analysis of why the New York Times needed the change. To start with, a country’s political state may affect a company’s economy (Contributor, 2011). For the New York Times, it was not certain how America’s government could have changed policies based on digital migration. In the case of the tax policy change, the government may increase taxes due to digitization because digitization can lead to more profits. For example, if several other media companies migrated to digital operations, they will likely earn more revenue. Because of this, taxes may increase. Therefore, the newspaper needed to change in case such a policy was implemented.
Secondly, the economic factors significantly influenced the Change. By the early 20th century, the American economy grew faster, which was influenced by technology’s growth. For this, the inflation rate was also going high. In the 1990s, the technological revolution enhanced a new entrepreneurial culture that changed America’s economy (Moffatt, 2018). For example, the introduction and development of Microsoft computer software by Bill Gates changed how business was conducted. Also, more corporations were being introduced, and this improved the economy. Hence, to align with the fast-changing economy due to digitization, the New York Times had to transform to digital.
The social factors that surrounded the newspaper were changing. The cultural trends of reading the newspaper were slowly vanishing. Initially, reading a newspaper was associated with pride and respect, but using a phone or computer was the norm when technology started advancing. For this reason, the newspaper industry was losing its market because buying a newspaper was no longer a trend. Also, the population in terms of demographics was changing. A more knowledge advanced community was emerging, a community that did not need to carry hard copies of newspapers around but to read them digitally through a phone. Because of such social trends, the New York Times had to look for an alternative, or otherwise, end the newspaper. Due to this, it opted to change to digital operations.
The technological factors may be the major influence of the New York Times change. This is because all the other factors are in one way or another linked to technology. The introduction of devices such as mobile phones and computers contributed a lot to the change initiative. However, the primary factor related to technology is the internet. If it were not for the internet, digitization, even with the devices, would not have been achievable. The internet carries the most massive weight in transforming to digital. There was the emergence of social media platforms and websites because of internet access, and readers completely shifted their attention from newspapers. The news was no longer published in a newspaper; it was posted on social platforms; this made the newspaper industry lose much of its readers and revenues. For this, the New York Times decided to shift to publishing its content on digital platforms such as the website as well as social media.
Lastly, legal laws were not potentially favorable. Many industries are prone to changes in the legislation that governs them, and the media industry is no exception. With the advancement in digitalization, one may not be certain what digital laws may be applied to industry both internally and externally. Because of advances in technology, more legal regulations in the media industry were being implemented, such as copyright and intellectual law, and defamation law. These laws affected how the newspaper published its content. For instance, reproducing someone else’s content without the owner’s consent became illegal through copyright law. Although the law was there before, digitization made it stronger and fully implemented. Hence, it was an influence of the need to transform from analog to digital.
Digital transition at the New York Times started in 2011 when the organization hired over 100 tech employees alongside its staff, a 10% increase in the workforce (Barnes, 2018). The New York Times had to strive and innovate over a short period and leave its deep-rooted culture and the long legacy. After analyzing why it needed change, the change to digital transition had to be implemented. Chua (2019) says that business change is inevitable, and it is either an organization embraces and adapts to the change, or it dies. For the NYT, it chose to adopt, implement, and adjust to the change in technology. Unlike other newspapers, the New York Times made significant steps towards digital transition.
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The organization employed a multipronged strategy with different aspects. The tech employees were tasked with strengthening the newspaper’s main product, the news report on the web, android, and iOS. Furthermore, they created a new department comprised of interdisciplinary employees. They included; newsroom employees, engineers, designers, marketing, among others. To effectively implement the Change, the organization involved a consultation company called McKinsey & Company. McKinsey advised the New York Times to have three products in their digital market. One is the opinion app that has gained so much popularity and ranked one of the best. It is also one of their most successful sections.
Secondly, the New York Times opted for a streamlined version of the news for the millennial generation. According to Kurt (2020), millennials were born in 1981-1996, mostly do shopping on smartphones, and have significantly better buying habits than the past generation. Besides, according to the United States Census released on June 25th, 2015, the millennial makes more than a quarter of the U.S population (U.S Census Bureau, 2015). Organizations have learned that this is the best generation to target because their purchase power is more robust than any other generation. Also, the generation grew up when technology innovation started. Hence, it is more reliant on technology and the internet. This information led the New York Times to concentrate attention on millennial and make them the stepping-stone into digitization.
Thirdly, the organization decided to digitize its recipe section on newspaper into a cooking app and add 15,000 of their recipes. After the three products were done, the company hoped to implement the next digital transition strategy, creating a suite of la Amazon Prime products. This involved guiding people “on what.” For instance, what to cook tonight, what to read next, or what to wear on a particular occasion. Generally, the strategy involved creating a diversity of digital products that are trending and that the current generation would be interested in. Later, the New York Times made a virtual reality application and partnered with Google to launch the V.R. app by shipping 1 million Google Cardboard headsets. This added quality to the New York Time’s V.R. app, and advertisers came by wanting to be associated with the app’s prestige, something that gave the New York Times hope in the digital transition. In general, the New York Times employed two types of strategies; the multipronged strategy that saw it diversifying on several products, and sought professional advice from McKinsey and company.
Advantages and Disadvantages of how the Change was implemented
One advantage is that the strategy was professionally implemented because the organization sought professional advice. Were it not for McKinsey, the New York Times probably could not have known the type of products to digitalize or the type of audiences to target. The consulting company is aware of what lies before digitization; hence, it prepared the New York Times for the consequences of the transition. Involving a consulting agency was crucial because of the confidence needed to implement a change. The newspaper company was confident that with the help of a professional consultant, the Change would be successful. Secondly, employing a multipronged strategy was advantageous because it enabled the organization to focus on different aspects that brought revenue to it. The cooking app, the news website, and the opinion app diversifies the organization’s revenue. Instead of focusing on the news only, the organization focused on more than one element. Also, the implementation was speedy, such that the newspaper did not lose its clients in the process.
The main disadvantage is that the strategy may have caused some employees to lose their jobs. Initially, when everything was done in an analogue way, the newspaper had employed quite a number of employees because of the writing and printing works. However, when they digitized, such people lost their jobs because the digital content did not require printing papers. Secondly, because the implementation occurred relatively fast within one year, and the organization was striving to match digitization, many finances must have been used. Radical Change is said to interfere with an organization’s resources and norms (IGI Global, n.d). Therefore, in this case, the New York Times may have interfered with its resources, both in terms of money and people. In the case of money, it most likely used more money than it could have used if the Change was incremental.
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On the other hand, in terms of human resources, the employees may not have been prepared for the Change. Prosci (2020) says that employees must take the initiative for a chance to be effective and change how they do their jobs. Hence, change is greatly influenced by human resources. Considering the organization implemented the Change radically, employees may not have prepared for it, and thus, they may have not effectively responded. Although this may not be included in the organization’s profile, the theory is that employees may not fully embrace such a radical change.
Achievement of the Outcome
Transition to digitization appears to work for the New York Times. According to the organization’s January 2017 report, “Last year, The New York Times brought in almost $500 million in purely digital revenue, which is far more than the digital revenues reported by many other leading publications (including BuzzFeed, The Guardian, and The Washington Post) — combined” (Albanese, 2018). This translates to it that digitization has favored the organization, and it is far ahead of other popular publications that started digitization earlier. The key behind this is effective change planning and implementation. The NYT cooking app is also increasingly monetizing and has been rated one of the public’s best cooking apps. Miyao (2017), on his website, publishes that, “I use the NYT 9New York Times) Cooking app on my iPad, and there are even videos to walk you through recipes making it even easier to learn”. With such reviews, the Change that NYT made means it is effective, and it is working. Furthermore, NYT has been rewarded for its high-quality content on the virtual reality app.
Mainly, digitization has influenced the New York Times’ success in four ways, as Marmol (2017) reports. One, simplifying subscriptions to reach a younger audience. When implementing the Change, it focused on the millennial generation, which marks the highest percentage of its audiences. Therefore, it has to keep the subscriptions at that age’s range. Secondly, digitization has improved advertising and special sponsorships. It partnered with Google and also released its own mobile ad format in 2015. Thirdly, optimization for different mediums. The organization focuses not only on one medium of dissemination but also on smartwatches, emails, newsletters, and apps. This enables them to collect revenue through different mediums. Lastly, digitization has extended NYT’s international reach compared to initially, where its audiences were concentrated in America.
Transition to digital operations has seen the New York Times succeeding. After the emergence of the internet and the advancement of technology in the early 20th century, in 2011, NYT developed the need to change. The newspaper noticed that people were no longer concerned with reading newspapers, and they were instead focused on scrolling their smartphones. This saw the newspaper industry dropping its revenue from $60 to $20 billion between 2000 and 2015. Due to this, NYT had to change, and in 2011, it started its digitization journey. The implementation involved creating digital products in terms of apps and websites that saw the organization succeeding even more than the analog era. It also involved consulting McKinsey Company that offered advice to NYT. The significant advice it offered was to focus its change on the millennial generation and incorporate its recipe into a cooking app. In 2016, the digital revenue that the effects brought was $500 million, as Albanese (2018) states. This has been made possible by digitization in the following ways; simplifying subscriptions, improving advertising and unique sponsorship, optimizing different mediums, and extending international reach. In summary, the New York Times migration to digitization has enabled it to gain a competitive advantage over its competitors like the guardian. Hence, it can be concluded that digitization simplifies business operations and may lead to increased revenue.
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