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The Gray Lady has fallen and she can’t get up, as Murdoch comes in for the kill on the NY Times with hyperlocal news 7/3/07

Posted by Steve Boriss in Murdoch, NY Post, NY Times.
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As the days pass, it is becoming clearer and clearer that Rupert Murdoch sees blood in the water at the NY Times (NYT) and he is coming in for the kill. With a stock price half of what it was 5 years ago, classified ad revenues down 13%, retail ad revenues down 15%, and a Morgan Stanley-led stockholder revolt on its hands, the Gray Lady has fallen and it looks like she can’t get up. The damage that Murdoch’s NY Post has inflicted on the NYT is often overlooked because the Post’s 725K circulation (+8%) seems to be dwarfed by the NYT’s much larger 1,120K circ (-2%). But when you consider that about half of the Times’ circulation is outside the NY area, it becomes clear that the NY Post has a big lead in the geographic area that matters most to advertisers and profits. Not that Murdoch is keeping his intentions secret — he said last week “the New York Times [has] got the only position as a national elitist general-interest paper…It has a huge influence. And we’d love to challenge it.”

Now, Murdoch is hitting the Times when it’s down by getting a jump on hyperlocal news, which ultimately may be the only thing left for metro dailies to grab onto to survive. His purchase of two more sub-metro weeklies now gives him hyperlocal resources in 3 of the City’s 5 boroughs, as reported by the NYT itself. This is happening at the same time the NYT is launching its hyperlocally-misguided City Room, a centralized operation that is exactly the opposite of the decentralized operations that will be required to provide hyperlocal news. Unless dramatic changes happen soon, the country’s “Paper of Record” might eventually not be worth much more than the value of its prestigious brand name.

Comments»

1. Lucas - 7/3/07

The real question here is whether a market exists for a national newspaper that has no roots in any particular geographic local coverage. USA Today is an example of that sort of success. Will the NYT transition to a national focus and concede the local market? Doesn’t matter. You’re guessing Murdock is going to make them concede it. So can the NYT succeed when only a national newspaper?

The NYT owns the newspaper where I work, but I have no insight on this question.

2. Jennifer Egan - 7/3/07

The Morgan Stanley revolt is meaningless. There is no money in hyperlocal news.

3. Steve Boriss - 7/4/07

Lucas — Yes, that is the question. Moreover, given the ultimate convergence of news to the web, a national focus will place them in competition with innumerable national and global competitors, many of whom will have superior multimedia capabilities.

Jennifer — Keep in mind that my focus is 5-15 years out (although the accelerating pace of events is making me wonder if I am going to have to slide that forward). True, there is no money in hyperlocal news today, but there will be with the ultimate collapse of metro news. Metro is an arbitrary geography necessitated by technology — people would rather get news that affects them directly (hyperlocal news), or get their national/international news from the best national sources. The biggest metro-area stories today, like major league sports and weather, can easily be co-opted by non-local news outlets. When metro papers and local TV affiliates collapse/consolidate, metro advertisers will still need to advertise, and there will be a gush of money to fund hyperlocal news.

Re: Morgan Stanley, I would say that the NYT’s condition is unsustainable and something will surely happen to change it, whether by stockholder revolt or something else. Unless things get better, the two choices are either: 1) a meltdown of the Sulzberger family stockholders to allow a sale (e.g. the WSJ’s Bancrofts) or a shareholder restructuring, or 2) the unthinkable — that the Sulzberger family will allow the NYT to not-so-slowly go out of business without doing anything about it. So, I think a family meltdown is inevitable.

4. Chris B. - 7/5/07

“There is no money in hyperlocal news.”

Sounds kinda like the IBM executive in the 1970s who told Bill Gates that there was no money in operating systems.

5. reuben - 7/12/07

steve, you’re onto something here. I can smell it? There is money to be made here.

6. reuben - 7/12/07

Steve, I read all the Murdoch posts. I know little of the intricacies and theories of news, but am I fascinated by it now. You present some exhilirating insights


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