TThis week, the New York Times (NYT) signed a deal with Facebook to distribute instant articles through Facebook’s news feed. The NYT is sacrificing audience for ad revenue. Could this be a case of “digital myopia”? Is NYT making a mistake by defining its business as content distribution instead of the audience trust?
In 1960, Theodore Levitt coined the term “Marketing Myopia.” His main point was that businesses will do better in the end if they concentrate on meeting customers’ needs rather than on selling products. Levitt introduced the famous question, “What business are you really in?” And with it the claim that, had railroad executives seen themselves as being in the transportation business rather than the railroad business, they would have continued to grow.
This deal has all the symptoms of modern “marketing myopia.” The NYT in concert with five major publications (BuzzFeed, NBC News, and NatGeo are said to be also joining the rollout) are giving up “audience” control in exchange of the distribution and monetization of their content. While the deal allows the NYT to keep all the consumer data, nothing guarantees Facebook from changing the rules down the road. They have done it in the past. Facebook becomes the gatekeeper of the audience and NYT becomes just another provider of content.
On a positive note, you have to give credit the NYT for trying something new. They have been bleeding. The NYT app has not worked as expected. The Times gave up on charging $8 a month for its mobile news app, NYT Now, making it free in hopes of attracting more users and, ultimately, more ad revenue. This new Facebook deal opens the door to the nearly half of American Internet users who get their news about politics and government on Facebook, according to a Pew Research Center survey conducted last year.The NYT is also limiting this experience to 5 articles per week. Perhaps this is inevitable and the NYT doesn’t have much of a choice?
I get that the NYT doesn’t necessarily have a better option. But they need to focus on services, not content. Audience trust, not content, is the scare resource. If the NYT is in the audience trust business, maybe it could consider packaging and selling its content to businesses for decision making in a similar way that Bloomberg and Reuters do today? The NYT could become a provider of data and analysis for social, economic and political issues. This does not mean that the newspaper side won’t continue to exist. It just means that advertising and newspaper subscriptions are not the only way to monetize and survive in this digital economy.