Remarks at Tsinghua Summit Forum:
On Global Newspaper Operation
October 22, 2003
Dear colleagues and friends! Welcome to the jungle of the market economy--a place where rich rewards abound but one with an environment that can be very cruel. To survive and prosper you must abide by certain rules. Judging by the American experience, here is one of the first rules: You must accept change as a constant in your operations. The tastes and needs of readers and advertisers constantly evolve. If you do not keep pace and respond to them inevitably your newspaper will disappear. This constitutes a very tough challenge for Chinese newspaper editors. The global society is evolving more rapidly than ever before-- and your country probably at greater speed than any other. Your papers must therefore adapt in content and format at a pace that will rigorously test the sensitivity, skill and courage of editors. Your task is made more difficult by the mounting competition from the electronic media as your people in greater numbers afford television sets and computers giving them access to the Internet.
So what is to be done? Let me say here--if the American experience is any guide--if you are geared to adapt to the changing requirements of your readers and advertisers--you can face the future with confidence. As for the electronic competition, in the United States, with the emergence of the Internet, some observers dubbed newspapers as dinosaurs and predicted their demise. This has been proven wrong. Not surprisingly, if we consider the historical parallels. Similar dire predictions were made about newspapers when radio was introduced. And when television came into being it was said that radio no longer had a future. On the contrary, radio is now prospering in the United States. No! Newspapers will not succumb to the Internet. Like radio to television, print newspapers in the United States accommodated themselves in their editorial content and in advertising to the electronic competition. As a consequence newspaper circulation has held up quite well with only relatively minor declines. There are more than fourteen hundred newspapers being published daily in the United States and more than eight hundred Sunday. Not all American cities are able to support two newspapers. This has been the case for some time. In some of these communities where there are two competing newspapers the two have entered into Joint Operating Agreements in which the editorial departments remain independent but production facilities are merged and costs shared. As a back-up, most American newspapers are now publishing electronic editions on the Web. However, while a newspaper such as The New York Times is able to register more than fifteen million viewers for its Web version, profit from Internet operations generally have been very marginal. The main source of revenue by far remains the print editions.
You will gather that I am not pessimistic about the future of print newspapers. That certainly is true. But I do not pretend to be so intimately familiar with where your newspapers stand today in their development so as to forecast your future with absolute confidence. And I hesitate to pose as an adviser in the country where paper and movable type were invented, and where journalists and their newspapers are setting admirable standards for investigative reporting and the most serious examination of many facets of your dynamic society. You face new problems in shifting from subsidy to marketing, but you are not novices. You are already deep into experimentation with various forms of subscription and street sales as well as engaged in head-on competition for advertising with myriad forms of publications.
However, I thought it might be useful if I recalled for you a period in the history of The New York Times when our future was clouded as yours may seem to be to some of you today. I was then managing editor of the paper. Our problems, then and now, are in many ways different from yours. That is certainly understandable. Each society develops techniques of journalism compatible with its culture, political system and the special needs of its people. Yet there are certain constants in the newspaper journalism of our two countries, which determine success or failure. And it to these constants I will address myself today.
In the early seventies, The New York Times was in financial difficulty. Circulation and advertising were shrinking. Many of readers were moving out of New York City, which had been our principal market, into suburbs in which they shifted to smaller newspapers appealing to their local interests. The paper was no longer very profitable. At one stage the Times company was earning more money from its newsprint mills in Canada than from the newspaper itself. But then, in the mid-seventies, a number of pivotal developments took place, which rescued the paper from the brink of disaster.
The publisher of our paper, Arthur Ochs Sulzberger, put into place a new business management team that was eager to engage closely with the editors and willing to take the risks involved in changing the format of the paper. At that point in our history, The Times was a rather gray two-section newspaper with shrinking advertising. Seeking solutions to our problems we entered into an intensive review of the format of the paper and its markets--as affecting both readership and advertising. It was obvious that there was need for new formulas. One of our first corrective moves was to begin the development of weekly editions in the suburbs of New York, which covered local news in greater detail than space limitations allowed in our main sections. Philosophically, and most importantly, we recognized a change in the attitudes and interests of our audiences. The American people, emerging from the trauma of the Vietnam War, were looking to enter into more fulfilling personal lifestyles. They were seeking more comfort, greater convenience in managing home and workplace, and enjoyment of daily life. Now this evolution in attitudes certainly is very familiar to you. Many of your readers certainly are becoming more consumer oriented and drawn to entertainment and other pleasures as a consequence of the dramatic improvement in your economy.
At The Times, in response to these trends, we introduced in 1976 our Weekend section, which appeared on Friday and was devoted to entertainment and cultural interests. It emphasized personal service with a detailed guide to events together with reviews of what was best. It was an immediate success in terms of readership and advertising. Its success impelled us to begin thinking of other lifestyle sections. But we, as editors, were hesitant and worried that moving into these areas of popular appeal might dilute the serious character of The Times and its commitment to comprehensive hard news coverage. We tackled that problem in two ways. First, we sought and received an assurance from the Publisher that the space in the paper devoted to hard news, such as local, national, international, financial, science and the like, would not be reduced to make way for the lifestyle material. Secondly, we committed ourselves to applying the same standards of quality to the lifestyle material, which traditionally had governed our hard news columns. There would be no frothy spinning of any stories simply to attract readers.
Six months appearance of Weekend, we introduced the Living Section, which featured everything from cooking and dining at restaurants, to personal health, to shopping. The Home section made its appearance the following year featuring tips on how to meet the needs of home and garden, and shortly after: Sports Monday came into being and on Tuesday, Science Times. Both were responding to increased reader interests. With the emergence of the Information Society publication of computer columns in Science Times produced a bonanza of advertising. All of these sections were designated "C" sections, and made up the third part of the projected four-section paper behind the main news section and the Metropolitan section, which was devoted to local news. Some of your newspapers, and including the street vendor sheets, have been experimenting with this softer news, featured in our "C" sections, as you appeal to your growing number of affluent and educated readers.
In 1978, Business Day, was introduced as the fourth section of the daily paper, Monday to Saturday. Previously, the financial pages took a narrow approach to business news and were tucked away in the rear of other sections. Business Day, with a hard news front, was targeted toward satisfying the ordinary investor more than the Wall Street specialist. As is happening in China today, smaller investors were coming into the stock and bond markets, either directly or through pension funds. Business Day was targeted to meet the varied needs of this growing economic class and their interest the variety of new investment instruments such as CDs, mutual funds and money markets. The section also notably offered personal advice columns, a feature of interest to Chinese consumers as they cope with new problems of credit card and household debt. Business Day was also was also a challenge to the Wall Street Journal, which for many years had dominated coverage of business news. Let me add here: With China now one of the leading players in world markets and entering into WTO, there is a great eagerness abroad for reliable information about opportunities for trade and investment in this country. Chinese publications are in a strong position to exploit these demands with international business publications.
One of the keys to success of the Times four-section paper was the use of new and bolder designs. The paper was made more attractive with innovative typefaces and more lavish use of photos and other illustrations. It would be many years before the introduction of new production facilities would allow for color into the daily newspaper. But prior to that day, the imaginative designs of the four-section newspaper transformed the old gray lady, as the paper had become known, into a sparkling, inviting entity. Enhancing design changes were also made in the Sunday sections. This make-over was described by the Wall Street Journal as "one of the most successful redesigns in recent newspaper history."
None of this would have been possible without close collaboration between the journalists and the business executives. To guard the editorial independence of the newspaper, a wall had been erected between the news and business departments. As the creation of the four-section paper went ahead, mutual trust and understanding overcame differences and produced the fusion of talent and energy, which made for success. The newspaper was transformed into a huge moneymaker and its four-section format became a model for newspapers throughout the United States. Many of the design principles of the four-section paper were extended to the company's chain of regional newspapers. In subsequent years, other changes would be made in the paper, including the addition of new sections in keeping with the dynamic evolutionary principle.
In 1980 the National Edition was created as new technology made possible instant transmission of pages to satellite plants around the country. At first the paper was simply a reproduction of the New York edition. After considerable debate among editors, regional editions with emphasis on local interests were developed, the first being that which serves the West Coast. The National Edition as a result became what it is today, the central driving force in the steady build-up of circulation nationwide. The company is now extending its reach globally with electronic circulation on the Internet web and with satellite distribution of the International Herald Tribune.
The regional approach incorporated in our National Edition is one that may have a significant future in China. Your vast country with its regional diversity is a natural market for satellite journalism. I am not speaking of a central organ, such as the People's Daily, which is essentially political. I am referring to regional journalism of a more general nature catering to local consumer tastes, needs and problems. Some of your provincial newspapers with their local-oriented metro editions are already exploiting that opportunity in urban markets.
In this review of a turning point in the history of The Times, I have dwelt largely on structural matters relating to creation of the four-section paper because I believe that experience is pertinent to your entrance into more aggressive marketing. I would be remiss, however, if I did not emphasize that the success of The Times relates even more importantly to another set of fundamentals. Those fundamentals are epitomized in the creation in 1970 of what we all the OP-Ed Page, the page of the paper, which faces the editorial page. Let me give you some background to the introduction of that page. In keeping with our tradition, the editorial page has its own editors and functions completely independently of the News Department. The editor of the Editorial Page reports directly to the Publisher, who can, if he chooses, make his opinions known through the editorials on that page. The Publisher is not involved and does not influence the day-to-day coverage or editing of the news, which is under the supervision of an Executive Editor. Thus, we have a wall between news coverage and editorial opinion. Times readers demand that this wall be maintained without compromise. They expect the news staff to function independently of every interest group, including political parties and government. The success of The Times turns on the principles of comprehensive and fair news coverage, separation of news and editorial opinion, and independence. The development of the OP-ED Page reinforced that approach by opening the paper more to its readers. The page invited contributions of opinion articles from readers with diverse views, often critical of opinions expressed in editorials on the opposite page. In a short period of time, the OP-Ed with the articles of contributors appearing alongside of the columnists of The Times became one of the most popular and best read pages of the newspaper. I would suggest to you that going into the marketplace in economic terms might very well--for your success--go together with exploring the marketplace of ideas by inviting your readers to freely express their thoughts in your columns. Opening free forums for your readers would be very much in keeping with the recent call of President Hu Jintao for greater participation by citizens in the political process.