New York Times - Short Term Pain, Long Term Gain

The printed piece is having a hard time, as is all physical media. The technological revolution that has transformed information, both video and audio, from disk and paper to bits and bytes, is only changing faster. Data is no longer simply delivered, but shared in the cloud, available wherever, whenever, and however you want. For companies whose fortunes have been in physical media, their future lies in digital media. But there is a cost to the ROI and if you don't pay, your company will die.

Netflix is transforming, Blockbuster didn't. Barnes & Noble is transforming, Borders didn't. And newspapers and magazines are transforming, some faster than others. For The New York Times, it means a growth in digital subscribers as print subscription declines. "For those tracking the success of the NYTimes.com (NYSE: NYT) meter that started ticking in March, the New York Times says it ended the second quarter with more than 1 million digital subscribers." A quarter million are digital only customers, a number that will surely increase as tablets and e-readers continue to gain momentum.

And with that shift comes lower operating costs, both in the printing and distribution, and higher margins. For consumers, faster access, as well as more timely, able to refresh and add new content to meet the demand for breaking news. Consumers are getting more comfortable accessing newspaper and magazine articles off digital devices. Subscription models still need to be tweaked to provide flexibility for purchase options with a value proposition marketing message. In the early days of print, you got a cool phone with your Sports Illustrated subscription, today it could be access to other digital products - a month of MLB.com, a month of Sirius.com, or a free movie download. A little incentive marketing can go along way.

For The New York Times, the short term pain will only result in future profitability. These steps into the digital world are necessary if publications like these want to survive and compete. Stay focused and innovative, NYT, digital is here to stay and you are heading in the right direction.