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The Times They Are A-Changin’

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Chart: Numbers Behind The New York Times Digital Transition

The Times They Are A-Changin’

The Numbers Behind the New York Times’ digital transition

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

For the most part, legacy print media stalwarts are dying a death by a thousand cuts.

There are exceptions to this rule, and The New York Times is often touted as the best example of an old-school media company that is successfully navigating the challenging transition to digital. They’ve experimented with different types of content and tactics to get eyeballs, while also shifting their company-wide strategy and culture to take a digital-first approach.

While pundits give credit to the Times for their latest efforts, this doesn’t mean it’s been an easy transition for the iconic newspaper. The path forward has been littered with roadbumps, and the most recent one is hard to ignore for shareholders.

Earlier this week, The New York Times announced a 95.7% decrease in quarterly profit. We dug a little deeper in this week’s chart to provide some context behind the newspaper’s challenges in maintaining its relevance in the 21st century.

Goodbye, Ad Dollars

The primary challenge faced by the Times is pretty obvious.

In the early 2000s, the company easily made over $2 billion in advertising revenue per year. Today, they make about $600 million from ads.

Why has the transition to digital hurt ad revenues so much? There are a bunch of reasons, but here’s a few of them:

  • Physical circulation of The New York Times and other newspapers is dropping rapidly.
  • Traditional display ads aren’t particularly effective, and are part of the “old-school” of digital thought.
  • Programmatic bidding drives down prices for these ads, bringing in even less revenue.
  • Digital lends itself to long-term, results-driven campaigns. It takes time to set these up and measure them properly, especially at scale.
  • Ads need to match the editorial stream to be effective. Quality over quantity.
  • There’s more competition in the digital space, which is a stark contrast to the distribution oligopolies enjoyed by big newspapers in the legacy era.
  • Madison Avenue is also slow at switching to digital, which only adds to the lag time.

These are just some of the reasons why advertising was able to make up 65% of the Times’ revenues in 2004, but only 39% in 2016.

Hello, Digital Subscriptions

While I don’t personally agree that a paywall is a long-term answer to any of their problems, it is true that the New York Times has used this as a temporary crutch to at least counter lost ad dollars.

In Q3 2016, revenue from digital-only subscriptions increased 16.4%, and money coming in from subscriptions has increased year-on-year since 2011.

Sometime between 2011 and 2012, subscription revenue (powered by digital-only subscriptions) passed ad revenues as the most important source of incoming cash for the company. The ramp-up has been impressive, and The New York Times now has 1.6 million digital subscribers.

My personal take? Digital subscriptions will plateau in the next five years or maybe sooner. Further, I think that content that isn’t industry or niche-specific will generally drift towards being free for users over time. The New York Times will have to solve their ad problem, but the paywall will buy them a bit of time to do so.

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Animation: The Top 15 Global Brands (2000-2018)

This stunning animation shows a dramatic change in the world’s most valuable global brands. Watch tech companies like Apple shoot up the rankings in style.

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Animation: The Top 15 Global Brands (2000-2018)

Time travel back to the early-2000s, and a list of the world’s most respected brands might be surprising.

Tobacco company Marlboro is still one of the top 15 global brands with a value of $22 billion, while companies like Nokia and AT&T also help to round out the group.

Aside from Microsoft, the tech companies at the time were mostly focused on hardware and services. HP was considered a top global brand at the time, and even IBM was still making PCs until the year 2005.

The Platform Revolution

How times have changed.

In today’s animation from TheRankings, you can see how the list of the top 15 global brands has evolved over the last two decades or so.

The visible shift: as soon as Google hits the rankings in 2008 (2:21 in video), it becomes clear that the money is on the software side – particularly in coding software that ends up as a dominant consumer platform.

Shortly after, companies like Apple, Facebook, and Amazon enter the fold, quickly climbing to the top. Here are the final numbers for 2018 in terms of brand value, with data coming from Interbrand:

Top 15 Global Brands in 2018

The Problem with Hardware

What’s the difference between the big hardware firms of old, and the successful ones that dot the list today?

From a business perspective, hardware companies need to have a bold and accurate vision of the future, constantly taking innovative strides to beat competitors to that vision. If they can only make incremental improvements, the reality is that their competitors can enter the fold to create cheaper, similar hardware.

Samsung, which finished 2018 as the world’s sixth most valued brand, is a good example of this in practice. The company has had the top-selling smartphone for every year between 2012-2018 – an impressive feat in staying on top of consumer trends and technology.

Despite Samsung’s success, it remains stuck behind four other tech brands on the list – all companies almost exclusively focused on platforms: Microsoft, Amazon, Google, and Apple.

Why are Platforms so Dominant?

Constant innovation is a good barrier to entry if you can keep doing it – but the platforms have an even more bulletproof strategy: being everywhere at once.

Facebook uses the powerful network effect from billions of people as a moat, and then it buys up-and-comers (Instagram, WhatsApp) to cover even more ground. As a result, competing with Facebook is a nightmare – even if you could theoretically acquire new users at $1 per user at a ridiculous scale, it would require a marketing investment of billions of dollars to make inroads on the company’s audience.

Microsoft owns various platforms (Windows, Xbox, LinkedIn, Azure, etc.) that help insulate from competition, while Google’s strategy is to be everywhere you need to search, even if it’s in your living room.

Because platforms have massive scale and are ubiquitous with consumers, it gives them the ultimate pricing power. In turn, at least so far, they have been able to establish the world’s most powerful consumer brands.

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Meet Generation Z: The Newest Member to the Workforce

As Millennials enter their early-30s, the focus is now shifting to Generation Z – a group that is just starting to enter the workforce for the first time.

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Every generation approaches the workplace differently.

While talk over the last decade has largely focused on understanding the work habits and attitudes of Millennials, it’s already time for a new generation to enter the fold.

Generation Z, the group born after the Millennials, is entering their early adult years and starting their young careers. What makes them different, and how will they approach things differently than past generations?

Meet Generation Z

Today’s infographic comes to us from ZeroCater, and it will help introduce you to the newest entrant to the modern workforce: Generation Z.

Meet Generation Z: The Newest Member to the Workforce

There is no exact consensus on the definition of Generation Z, and demographers can differ on where it starts. Some have Gen Z beginning as early as the mid-1990s, while others see it starting in the mid-2000s.

Regardless, Generation Z is the group that follows the Millennials – and many Gen Zers are wrapping up high school, finishing up their university degrees, or looking to get their first real jobs.

Millennials vs. Gen Z

While generational differences cast a wide net and don’t necessarily apply to every individual, here is what demographers say are some key similarities and differences between Gen Z and Millennials.

MillennialsGeneration Z
Raised by Baby BoomersRaised by Gen Xers
Grew up during an economic boomGrew up during a recession
Tend to be idealisticTend to be pragmatic
Focused on having experiencesFocused on saving money
Mobile pioneersMobile natives
Prefer brands that share their valuesPrefer brands that feel authentic
Prefer Facebook and InstagramPrefer Snapchat and Instagram

Generation Z tends to be more pragmatic, approaching both their education and career differently than Millennials. It appears that Gen Z is also approaching money in a unique way compared to past groups.

What to Expect?

Generation Z does not remember a time when the internet did not exist – and as such, it’s not surprising to learn that 50% of Gen Z spends 10 hours a day connected online, and 70% watches YouTube for two hours a day or more.

But put aside this ultra-connectivity, and Gen Zers have some unique and possibly unexpected traits. Gen Z prefers face-to-face interactions in the workplace, and also expects to work harder than past groups. Gen Z is also the most diverse generation (49% non-white) and values racial equality as a top issue. Finally, Gen Z is possibly one of the most practical generations, valuing things like saving money and getting stable jobs.

You may already have Gen Zers in your workplace – but if you don’t, you will soon.

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