During a panel discussion at the Milken Institute Global Conference in Beverly Hills this week, PayPal co-founder Peter Thiel came out with a bold claim: Twitter’s 1,000-plus employees will have jobs a decade from now while The New York Times’ employees should watch out for more pink slips in the future.
While CNNMoney didn’t go into specifics on Thiel’s claim, Netscape creator Marc Andreessen surmised that the widespread adoption of the internet has cut the profits of the venerable newspaper, which dismissed the internet in the 1990s as something that wouldn’t be important in today’s world.
He said: “It causes me a certain amount of pleasure today watching the New York Times Company try to cope with the consequences of the technology they laughed at.”
Now why would Thiel and Andreessen compare Twitter’s success with The New York Times’ struggles? It’s an unusual comparison, considering that Twitter as a social media network, and The New York Times is the United States’ newspaper of record. Twitter is a platform that anyone can use and newspapers use Twitter as the modern-day equivalent of the news tickers found on Times Square. Twitter has been so successful that it is looking beyond just being a 140-character platform and diving into video with its Vine app and revamping the website to become a social media destination like Facebook or Tumblr.
The problem with Twitter is that it’s not a platform solely for news — and if it were, Thiel’s comparisons would make more sense.
However, Thiel may have a point when it comes to The New York Times, which, unlike Twitter, focuses solely on news. The death march of newspapers is nothing new, and while people are consuming news more than ever through their laptops and mobile devices, newspapers are dying left and right — mostly because they’re not getting enough advertising revenue and many people just aren’t buying the print edition anymore. People would rather look at Twitter updates and read the news online instead of reading day-old news in print.
If you based it on circulation alone, after many years of falling circulation, The New York Times is seeing it increase, and they recently surpassed USA Today as the second largest newspaper in the United States. It also helped that the Alliance for Audited Media, which tracks newspaper numbers, changed its format to include digital subscriptions and now nearly 61 percent of The New York Times’ circulation comes from digital sources like smartphones, web browsing and tablets.
The New York Times’ increase in circulation — especially in the digital front — means that people are still getting their news from the Grey Lady, but are ditching print for their own devices.
While readers haven’t abandoned The New York Times, if it does go under, it’s not because people stopped reading 1,000-word articles and got their news through 140-character bites. It boils down to money — and The New York Times’ increased circulation isn’t enough to stave off the decline in profits in the first quarter of the year. The company’s net income was only $3.1 million this past quarter, a 92 percent drop from the same period a year earlier. Unless The New York Times finds a profitable way to expand its reach in digital media and downplay its print offerings, the increased circulation would mean nothing to its bottom line.
Thiel’s vague black-and-white assessment that Twitter will outlast The New York Times will most likely be true, but it’s like comparing apples and oranges because they complement each other more than they compete.
You may also like: