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The New-York Times Company may wish to convince readers of the International Herald Tribune (IHT) newspaper that renaming it as the International New-York Times (INYT) is nothing more than a change of name, not of content or substance. However, this act of re-branding the newspaper to co-align it with the US-based brand could mean overseas much more because the IHT has grown into an iconic brand and an institute of culture, primarily in Europe but also in Asia-Pacific, the Middle East and Latin America. Truly, since its inception as the New-York Herald 126 years ago and through its past forms as the New-York Herald Tribune (1920s’-1967) and the International Herald Tribune (1967-2013), the newspaper has been directed towards American expatriates living abroad as their connection with home. Nevertheless, the newspaper has become popular among a much wider audience of English readers native in many countries, giving them a foreign or global perspective on news in their region and beyond. How necessary was it to rebrand the IHT as INYT at this time?

Statements made by senior executives at the New-York Times Company suggest that they are aspiring to integrate the global edition of the New-York Times closely with its US-based operation and editorial board. From a marketing perspective, the company aims at establishing a stronger consolidated brand of New-York Times globally (i.e., in the US and outwards)  with an eye focused on the digital (online) news media, worldwide. That means a tighter identification of the international newspaper/news-site with the United States.

It is important to reckon that hitherto the IHT offered an appealling, interesting and comfortable blend of local atmosphere, culture and attitudes with the “American Way”. The New-York Herald Tribune, which existed before NYT became an owner, has developed this approach originally and specifically in Paris, then extended all over Europe. Its key force of attraction was the respect it has paid for many years to the culture and values of Europe. So much that for an extended period during the 20th century there existed only the European edition of the New-York Herald Tribune, based in Paris, without its New-York edition that went bankrupt. Following the re-branding of IHT under the title of New-York Times, its management intends to take steps to increase managerial and editorial control from New-York, which risk the global edition of losing that special touch with the local habitats of its various market destinations overseas.

In 1967 the publishers of The Washington Post and The New-York Times salvaged together the defunct Herald Tribune from its previous owner and re-created the brand and format of The International Herald Tribune. The newspaper got its best reputation and expanded outside Europe during that period spanning the last 46 years. Its appeal could emanate from (a) bringing a combination of opinions and perspectives on current affairs from journalists and columnists with different political orientations and background expertise; (b) reliance on the resources of the Washington Post and the New-York Times as well as journalists originated in foreign countries (e.g., at their bases in Paris, London, and Hong-Kong); and (c) their interesting and novel coverage of topics such as science and technology, art, and not least, fashion.

However, the IHT changed its course in 2003 when the New-York Times Company forced the Washington Post into selling its share in IHT to the former. Thus NYT took full control of the newspaper. It is therefore, actually, during the past ten years that the New-York Times has gradually turned IHT singly into the Global Edition of NYT. Particularly in the last three years it could be noticed that the IHT was adopting the liberal line associated with the NYT in the US and a stronger presence of its home journalists. Furthermore, the company marginalised the original website of IHT in 2009 and merged its content with that of NYT.

When explaining their move of rebranding, the editor of IHT in Europe Richard Stevenson argued during an interview in October 2013: ” A couple of words in the name of the paper are changing (but) this paper’s name has changed multiple times throughout its history. The name change on the print newspaper does nothing to change the DNA of the operation here. It is simply bringing more of the resources of the New-York Times to the mix” (1). Stevenson is clearly trying to play down the significance of that ‘couple of words’ known as the “Herald Tribune” but he may err in uncomprehending its meaning and value to news readers in Europe and other regions. The name of the newspaper has indeed changed before, yet the expression “Herald Tribune” was the leading part of the paper’s name for nearly a hundred years. Moreover, it has become a symbol in the news media of a genuine international, open-minded news-source. Even more seriously there is reason to doubt if NYT can maintain the DNA of the “global edition” as Stevenson promises. The power of IHT has arisen in part from being only implicitly American — that is, the American voice in the newspaper was more subtle. A stronger reliance on resources of NYT in the US could lead to diminishing their sensitivity to events outside the US . Effective already, wherever an online reader touches a hyperlink on the front page of INYT (e.g., an article’s title, a topic on the right-hand banner), one is passed to content on a page of NYT — the INYT website appears to be no more than a facade. How does that maintain the DNA of the International Herald Tribune?

At the core of this new strategy is concern of NYT how to expand its exposure and strengthen its position in the digital media because that is where the future lies.  Circulation of print newspapers has been declining and revenue from advertising dropping almost continuously over the past decade as more news readers turn to the Web and mobile devices (e.g., using designated apps). It has led to predictions of the demise of print newsmedia any time soon — which has not happened yet but could still be imminent. Even Arthur Sulzberger, chairman of NYT Company from the dominant owner-family, announced at a conference in September 2010 that the NYT is expected to “stop printing the New-York Times sometime in the future, date TBD” (2), a rather ambiguous intention that yet attracted great attention. Last year the founder of Netscape and digital venture capitalist Marc Andreessen urged Sulzberger and NYT in response to act as soon as possible and not wait for another five or ten years. An important development that nonetheless has already taken place is the establishment by NYT and other news publishers of various paywall models on the Internet in order to put a value-tag on news information online and thereby starting to generate revenue from viewership vis-a-vis print circulation.

  • Revenue (US$) from circulation, which accounts for more than half of the total revenue of the company’s NYT Media Group (NYT+IHT), grew by 8.2% in the second quarter of 2013, though it could not offset the decline of 11.4% in revenue from advertising (3). Note however that the report is vague in referring to “circulation”: It is impossible to tell whether the increase reflects return of readers to print issues due to the paywall charges online or is it derived from subscribers of NYT online and in mobile apps.

The New-York Times wants to resemble other prominent newsmedia broadcasters like CNN and BBC and publications such as Wall Street Journal (WSJ), The Times of London, The Telegraph, and Financial Times that are recognized in the same name at home and in countries abroad. The ability to develop into a global brand depends on appearing with the same (root) name everywhere. Especially on the Internet, it is argued, the New-York Times has to appear with that name to be on the same playing level with its close competitors. The NYT, it should be noted, is already accessible online for several years and it is a familiar brand whose news stories are often cited around the world — all that regardless of IHT! The problem is that the NYT is not progressing as the management has expected:

  • The NYT brand is lagging in number of unique monthly visitors to its website (~40m in June 2013) behind CNN (~100m) and BBC (~70m); NYT has about the same number of visitors as the Guardian’s (affiliate of IHT in the UK) and leading on WSJ (~30m). NYT has also shown no increase compared to June last year vis-a-vis improvements for CNN, BBC and The Guardian (figures from comScore published by FT.com, 3).
  • Stephen Dunbar-Johnson, publisher of IHT, revealed while announcing their move in July that about a third of the 41m unique visitors of NYT come from outside the US; however, just 10% of NYT digital subscribers (70,000 out of 708,000) are located outside the US (3) — a gap marking the international weakness of their brand.

The expectation is that by bringing the IHT global edition explicitly under the umbrella name of NYT it will enhance the global image of NYT and attract more subscribers from outside the US. Mark Thompson, chief executive of NYT and former director-general of the BBC, suggested that the IHT’s heritage could be used together with existing international audience of NYT “to build a truly global force in news across digital and print under one brand” (3). There is undoubtedly good logic in joining forces to develop a stronger target brand on the world’s stage. But which brand was in better position to fulfil that role ? NYT was actually trying to compete in recent years with its own global edition name-titled International Herald Tribune, a confusing situation. Moreover, NYT in fact closed down its older international edition in 1967 to make space for developing the IHT. Now, the new move implies that the heritage of IHT so well built-up should be sacrificed to help the NYT succeed as a global brand after it failed to do so alone but really in the shadow of its own global edition, that is IHT.

The strategic thinking that appears to be behind the rebranding act is not only strange but sad. The NYT company does not disclose financial details on its two newspapers but it suggests that IHT was really doing better than NYT. All that Mr. Dunbar-Johnson was ready to tell the Financial Times was that “while the New-York Times does not break out the performance of the IHT, it is profitable” with no further details given (3). This raises a strong suspicion that NYT could not match the performance of IHT and consequently was laid as a burden on the shoulders of IHT re-named INYT.

A stronger global presence of an NYT brand in the digital arena is presented by top management as the main motivation for its move. However, re-inventing NYT as an international brand was not that much necessary. The NYT and IHT newspapers have been different products in attributes and target markets-audiences — one as its American arm and the other as its global arm. The company could have continued to develop the relationship between them, exchange news stories, and emphasise the linkage between their brands: The global arm of IHT benefits from the professional quality and credibility of its US-arm (and parent) NYT while the latter enjoys the popularity and prestige of a global arm IHT that “talks” to many people around the world, Americans and non-Americans alike. Many global companies hold a corporate website next to designated websites for prime products and brands. One just has to make sure consumers know how the websites are related while distinct.

Since the rebranding has already occurred, the INYT needs to keep and add to its bases as “legs” in key target regions in order to maintain the international DNA of IHT. There are already hints that the company may close its base in Paris because of high cost of keeping its staff in France.  While France may not have the same diplomatic and cultural clout it used to have 60 years ago it is still a pivotal player in Europe in many ways. If inevitable, NYT must consider other locations (e.g., Berlin-Germany, Amsterdam-Netherlands) on the European continent since removing that “leg” might ruin the INYT international stature that IHT enjoyed. Relying on its London base could signal to other European countries that America truly does not understand them.

The New-York Times wishes to become a familiar and appraised brand name worldwide like names of other newspapers/news-sites and that is understandable. Yet its situation is different from most others — it already had a strong global arm and unlike others that actually publish the same news-product everywhere NYT-IHT had the advantage of a news-product better adjusted to serve readers round the globe. They could have kept a portfolio of two strong products and associated brands without being suspected of nourishing the ego of NYT. Now INYT must work hard to protect and enhance its connection to places and people outside the United States.

Ron Ventura, Ph.D. (Marketing)

References:

1.  “DNA Unchanged in Renamed International Herald Tribune”, The Australian (Online, by AFP), 16 October 2013 http://www.theaustralian.com.au/media/dna-unchanged-in-renamed-international-herald-tribune/story-e6frg996-1226740843145

2.  “New-York Times Will End Print Edition (Eventually), Publisher Says”, The Atlantic (Online, a news agency item), 9 October 2010

3. “Newly Rebranded International NYT Focuses on Digital”, Financial Times (FT.com Online), 25 July 2013  http://www.ft.com/intl/cms/s/0/3d0edc40-f4a5-11e2-8459-00144feabdc0.html

Additional Sources:

NYT Company Website www.nytco.com — See their History Timeline

“In Digital Era, New-York Times Eyes Growth Abroad with Global Edition Replacing Herald Tribune”, Washington Post (Online, by AP), 15 October 2013 http://www.washingtonpost.com/business/in-digital-era-new-york-times-eyes-growth-abroad-with-global-edition-replacing-herald-tribune/2013/10/15/efa1a576-3579-11e3-89db-8002ba99b894_story.html

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This is a story about a daily newspaper that dared to challenge the veteran and established national newspapers by introducing itself to readers free-of-pay. Furthermore, the newcomer broke the line from the incumbents in its way of reporting and commentating on current political issues and events. Taking the two developments together, it seems to have driven the greatly upset publishers out of their minds.

It is a conflict complicated by entangling business with politics: rather than having a discussion on pricing and distribution as factors of competition, one is drawn into argument about political differences. Any debate on the quality of news information has become subject to differences in political position. Thus, the competitive struggle is too often diverted from business considerations to political concerns. Consequently, the news-media industry has become ever more politicized and tensions between the competitors reach new heights.

The free newspaper “Israel HaYom” (“Israel Today”) was founded by the American-Jewish billionaire Sheldon Adelson in mid-2007. From its inception, the newsmedia, mostly leaning from centre to the left, attacked the newspaper for its backing of then opposition leader Benjamin Netanyahu head of the Likud party, giving him a stage to voice his opinions and creating good publicity for him in the run-up to the next election (February 2009). Israel HaYom as well as advocates for Netanyahu denied that Adelson was acting on behalf of the Likud’s leader, yet they claimed that a different approach was needed to counter the unfair treatment and continuous bashing of Netanyahu in news reports. But beyond that, Israel HaYom pertains to provide news readers a different perspective on current affairs in Israel and worldwide, and “to be fair and balanced” as proclaimed in one of their five guiding principles.

Following the 2009 election Netanyahu became Prime Minister (PM), and yet the free newspaper of Israel HaYom continued to be published and even thrive — during 2009 and 2010 reader exposure to the newspaper nearly doubled (from a little above 20% to almost 40% on weekdays [*]). It became so popular that in the end of 2009 it also started to publish a weekend issue. The fact that Israel HaYom maintained its course after the election weakened somewhat the arguments of its opponents and gave rise to other explanations, mainly that Adelson aims to establish a different kind of newspaper in the country and thereof change the nature of competition in the newsmedia market. There could be genuine marketing reasons to justify the introduction of a free newspaper at that time: (a) eliminating the monetary cost of the newspaper to consumers was essential to invade the solid national market as quickly as possible while grabbing a notable penetration share of readers to set-in its roots , and (b) when news are abundant free of charge on the Web readers have much less motivation to give a chance to another paid newspaper. Especially to win the younger readers it was necessary to take the Internet playground into consideration. Israel HaYom’s income model relies on advertising, but as this source is suspected not to be sufficient, it also needs funding from the owner. Hereby, the newspaper has an essential resource, particularly for late entrants into a market: the financial backing of Adelson.

  • About 45% of the area in a weekday issue of Israel Hayom is occupied by commercial ads + 10%  dedicated to public announcements and classified ads.

Needless to say that the prevalence of Israel HaYom was much to the dismay of the veteran newspapers that intensified their fight. Generally, they have tried to raise as many doubts as possible about the motives of Adelson and Israel HaYom so as to delegitimize the newspaper:  it serves as a newspaper of the government and of the PM in particular which manipulates news stories; it cannot survive as a serious newspaper only on advertising; and funding a losing newspaper by Adelson proves that he has political rather than business objectives. They claimed as well as that its business practices are unfair. On the opposite side, Israel HaYom can make the valid argument that its competitors are raising political claims because their actions in the marketplace are failing to defeat it, that they need to conceal their lack of a competitive edge. The free newspaper also has a true case that publishers of at least two of its adversaries, Yediot Aharonot and HaAretz, have strong connections and influence in business and political circles alike and are using their media vehicles to advance their interests.

  • The main confrontation is with centre-left leaning Yediot Aharonot (YA) whose position as the leading (most ubiquitous) newspaper for three decades is being threatened by Israel HaYom — according to TGI surveys of media exposure Israel HaYom surpassed YA on weekdays two years ago and in the second half of 2012 was leading by a small margin: 39.9% versus 37.3%, respectively (on weekends YA [41.7%] still has a clear lead over Israel HaYom [32.8%]). YA is the most vigorous opponent of the free newspaper and champion of the campaign against it, particularly the political-oriented one.
  • The newspaper that had most to lose, however, was Ma’ariv because the free newspaper was aiming at its position in the centre-right. Nevertheless, Ma’ariv has had troubles long time before Israel HaYom arrived, and although it tried to put much of the blame for its fall on the newcomer, the latter’s arrival just accelerated the decline of an already weak newspaper. Ma’ariv, at a level of 10% exposure and after a repeated turbulence, is now under new ownership and leaning more to the right.
  • HaAretz is a clear left-wing newspaper, associated with the New-York Times and the Guardian (UK). It is a high-profile newspaper even though its exposure rate is just about 6-7%. HaAretz has been relatively less vocal, supposedly because it provides printing services to Israel HaYom.

But now comes a time to re-assess the efficacy of the free-of-pay model for Israel HaYom. After the recent election in January the newspaper is way past its challenge to gain the acceptance and approval of large stakes of the public — it has already proven that it has a place in the Israel newsmedia arena. It will be more difficult now to defend itself from suspicions and doubts about its income model and funding from Adelson, which may be legal but not reasonable in the public eye for the longer term. Furthermore, the newspaper has to consider the negative effect that an absence of price may have on its  brand image.

Israel HaYom has characteristics that are not typical of free newspapers. While most of the free newspapers worldwide are local-urban, this one is national. Israel HaYom gives extensive coverage of political events and current issues (e.g., security, economics and business, social affairs, crime) as well as international affairs, topics that free newspapers regularly report only briefly. It includes news items, commentaries, and opinion columns from prominent journalists as well as guest experts and ex-politicians. If fact, the newspaper recruited from the veteran newspapers some of their leading senior journalists. This profile makes it resemble more a traditional paid newspaper rather than a free newspaper. Furthermore, free newspapers are normally intended for light and brief reading that can be completed while commuting on public transport within 15-20 minutes —  a description that does not agree well with Israel HaYom.

On the one hand, consumers who are pleased with the approach and style of Israel HaYom will find it hard to refuse a free offer. On the other hand, questions are bound to pop-up in consumers’ minds over time, namely: How is it possible to produce a newspaper like Israel HaYom without revenue from consumers? How is it actually financed (advertising, Adelson)? And how long this operation can go on like that? What consumers would be specifically concerned about is whether they should trust the reliability and accuracy of news stories it reports.

Israel HaYom should be able to answer two questions:

  • First, do news consumers prefer reading Israel HaYom because they approve and like what the newspaper essentially provides — the way it reports news, its analyses, format and style — or is it only because they don’t have to pay for it (i.e., the formal budget constraint is waived)? If it is found that consumers do not have substantial preference for the newspaper, then the publisher better continue the free model, but it will probably not enjoy a long future. If however the preference for the newspaper is real and well-founded, then the free model should be re-considered because it is not appropriate for supporting and establishing its stature in the long run.
  • The second question is henceforth, what price should Israel HaYom charge from consumers? The price should be low enough to keep the offering appealing against the competition but not too low for consumers might dismiss it as of dubious quality (in that sense, no charge is qualitatively better than a too low price). It should be a price that positions the newspaper as popular yet valuable. If consumers are asked directly about their lowest price limit, they would probably set it at zero because they have been taught that lots of news can be accessed free online. But consumers may have a misconception that the cost of a newspaper is mainly the paper and print and ignore the cost of creating the news stories and articles — this issue is already debated in the last two years regarding the Internet.

The free model also has distribution implications. Israel HaYom is handed-0ut in many public places like train and central bus stations, large institutes like hospitals, shopping centres and on main street; it is also available in coffee shops. There is also a limited service of delivery at home at minimum charge. However, as the newspaper becomes more accepted and desirable, especially the weekend edition on Friday mornings, the inability to obtain it even at a price in points-of-sale can be annoying to consumers. A strong popular brand requires as wide availability as possible, not exclusivity or hard-to-reach stance. The distribution method of the free newspaper, particularly on weekends, may curtail its potential of reader exposure (e.g., versus Yediot Aharonot). But a lower performance on weekends may also occur because Israelis expect more in reliability and depth from their weekend newspaper and a free newspaper seems less adequate to that end.

  • Israel HaYom distributes 275,000 copies on weekdays and 325,000-375,000 copies on weekends that have to serve readers at public venues or for taking away.

Israel HaYom may start addressing the future of their model of free newspaper by distinguishing weekends from weekdays. On weekdays it may indeed not justify confronting the price question because the range for manoeuvering is relatively narrow (i.e., zero to 5 shekels = 1 euro) and the current income model may suffice. Discriminating price points in the range is likely to remain ambiguous (e.g., YA distributes promotional weekday issues for 2 shekels on the street). The weekend edition is another matter because it is perceived as a different product, a more comprehensive source of news information to summarise and digest the week’s events, and paid newspapers charge more than twice the weekday price. Moreover, Israel HaYom provides two supplements on the weekend. A price assigns an overt value to the newspaper and endows it with greater legitimacy as an economic product, especially when it relates to information. A price on weekends can also reflect positively on the newspaper’s image on weekdays.

News organizations are re-considering their policy of publishing news free of charge on the Internet. Income from online advertising is declining and print advertising remains after all more lucrative. Consequently, publishing free news online is getting less economic while continuing to diminish the perceived value of news information they provide on the Internet. Leading news publishers like Financial Times, The Times of London, Wall Street Journal and New-York Times have launched in recent months a model of paywall — view a number of articles free (e.g., 5 to 15 a month) but beyond that one has to make a paid subscription to read more content. It is going to be a long process of change but is important to follow: it may increase the attractiveness of the free Israel HaYom but it may also further hurt its credence as a source of news information. Nevertheless, a website with a paywall may serve Israel HaYom well as a future source of income and to establish itself as an invested and sound news source.

Ron Ventura, Ph.D. (Marketing)

(*) Statistics on reader exposure to media are based on Target Group Index (TGI) semiannual surveys.

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