Category winner: The New York Times Paywall
Who – the protagonists
Martin Nisenholtz, Senior Vice President of Digital Operations at The New York Times.
The New York Times was founded on 18 September 1851 by journalist and politician, Henry Jarvis Raymond, and former banker, George Jones. By 2011, it had won 106 Pulitzer Prizes, the most of any news organisation. But despite this journalistic success, its subscription and revenues had steadily dropped over the years.
The newspaper industry had been suffering from revenue declines over the past decade, and the transition to digital media was difficult to navigate. Revenues from online advertising were not sufficient to replace the loss of print revenue, and many publishers had explored charging readers for content. Specialised publications like The Wall Street Journal were successfully using the model, but several other general news sites had failed.
On 28 March 2011, The New York Times website became a restricted site with most of the content protected behind a 'paywall'. Users who exceeded the limit of 20 free articles per month were required to pay for either a digital or print subscription.
The New York Times Company is a leading global multimedia news and information company based in Manhattan, New York, US. The New York Times is the company’s flagship publication.
‘I think the majority of people are honest and care about great journalism and The New York Times. When you look at the research that we’ve done, tons of people actually say, Jeez, we’ve felt sort of guilty getting this for free all these years. We actually want to step up and pay, because we know we’re supporting a valuable institution.’ – Martin Nisenholtz
Would consumers remain as engaged with a site protected by a paywall? Would advertisers react positively to a move that walled off readers? Would readers value both the print and digital versions of the content, or would it become necessary to create new content? Should it introduce a 'leaky' paywall enabling determined users to slip through, or a 'bulletproof' paywall like the Financial Times version, where users had to pay before they could access any content? Which business model would work best?
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Vineet Kumar, Bharat Anand, Sunil Gupta and Felix Oberholzer-Gee
The authors discuss why students enjoy this case and the pros and cons of creating cases based on published sources.
Winning this award is a wonderful recognition of the value of the case, and the depth of understanding possible when using the case approach to study important business challenges.
This case focuses on the important issue of digital business models and digital transformation in the publishing industry. However, the principles and learnings involved broadly inform the dilemmas any firm or industry facing a disruption/transformation would experience.
Using published sources
The pros of using published sources are that it allows us to examine a broader range of business settings, firms and industries than might otherwise be possible.
The tradeoff is sometimes a lack of data and of the nuanced perspectives of executives that are often very helpful to our understanding. In industries that receive little attention such a perspective is often limited when using only published sources. In other examples, such as The New York Times, a wealth of information, including management perspectives and financial and customer data, is readily available from public sources.
The primary theme in the case is about understanding a potentially disruptive and transformative situation, which involves not just pricing or product strategy, but if the firm can survive doing business as usual without a full-scale transformation.
Such transformations bring about unique challenges involving how to manage the process, what the business should be, and understanding the external and internal factors that will enable its success. We see such transformation opportunities in a wide variety of industries, whether due to technological advances, infrastructure changes, changing consumer preferences, or even new regulations.
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