Compiled by Ray Young (RPM) and John Kelly (Daily Clips)

Monday January 9, 2017

Wal-Mart CEO: We’ll Be Shopping Very Differently in 10 Years

What will shopping be like in 10 years? No one knows all the details (that’s exciting!), but one thing is for sure: it will be very

different than it is today.

History is clear about that. In the mid-19th century, most people in the US were shopping at small markets. They would tell

the manager what they wanted, and then wait for the item to be retrieved from the back or from the supplier. After that came

the urban department store, supermarkets, then strip malls and discount stores.

Today, the pace of change is rapid. Ten years ago most customers were reading about the original iPhone, and wondering

whether it would be useful. Now they expect to order something on their mobiles, have it delivered or pick it up in store—

often on the same day, in a few hours, or even in a few minutes.

It’s up to retailers to adapt to these changes—and in some areas even lead the way—or they’ll fall behind and disappear.

Here’s what customers can expect their shopping experiences to be like 10 years from now:

1. CUSTOMER EMPOWERMENT AND EVEN GREATER INFLUENCE

Customer satisfaction has always been the number one goal for retailers, and in the future, customers will be more

empowered than ever to drive the change they want, as they get more control over their shopping experience.

Technology—the internet, mobile and analytics—is being used to do anything and everything a customer doesn’t want to.

Customers want to explore. But they need to have easy access to items they choose to use all the time. The historic trade-

off between price and service has been altered by technology and customers expect to save time and enjoy the experience

while saving money. They’ll fulfill their everyday needs—items like laundry detergent, paper, light bulbs, grocery staples and

shampoo—in the easiest way possible through a combination of stores, e-commerce, pick-up, delivery and supported by

artificial intelligence. Customer desires—think emerging fashion, fresh produce, and items they’ve never seen before—will

still be fun to explore in stores as well as with technology (think virtual reality).

Retailers that provide a truly unique, enjoyable experience and prepare their associates to provide excellent service will

have the advantage. At Walmart we already see the value customers place on personalization and convenience, through

our success with grocery pick-up and delivery in several markets around the world.

With the growth of the internet of things, customers will enjoy an increasingly connected or “smart” shopping experience

through a network of connections linking the physical and digital worlds into an ecosystem of devices, including vehicles,

stores and software. The internet of things, drones, delivery robots, 3D-printing and self-driving cars will allow retailers to

further automate and optimize supply chains too. Both sides of the equation—demand and supply—will change dramatically.

In addition, customers will continue to demand transparency around pricing and the supply chain. They’ll have less time to

research the products they buy—but they’ll care even more about how they are sourced. They’ll choose to shop with

retailers who provide that transparency so they can feel good about the items they purchase. This will require retailers to

work with manufacturers to source items responsibly and sustainably. Retailers who do this and share the information will

further earn customers’ trust.

2. I’VE SEEN WHAT YOU HAVE AND I WANT IT, TOO

Customers all over the world now know, and can see, what people in other countries have, and they want access to it all.

And they want it now. Chinese customers want access to Louis Vuitton bags from France and milk from Australia. Not long

ago on a visit to Nigeria and Ghana, I asked one of our local store managers what his one wish would be. His answer: “I

want you to put a Walmart Supercenter like the ones you have in the US right here and let me run it. My customers and my

family have seen what you have and we want it, too. We want those items at those prices.”

As Tom Friedman taught us, the world got flat and now it’s moving fast. The world needs inclusive growth provided in a

sustainable manner. People are demanding it.

retail-wef-chart Statista | World Economic Forum

3. SHARED VALUE

With all these changes, retailers will only survive if their business creates shared value that benefits shareholders and

society. Social and environmental sustainability will be engineered into our systems, and that will strengthen the

communities in which we operate, which will in turn appeal to customers. These changes, however, will require new levels of

cooperation and collaboration between retailers and NGOs, governments and educational institutions. Basically, we’ll design

retail and other businesses so that all stakeholders (as many as possible) benefit: customers, associates/employees,

shareholders, the communities we serve and those in the supply chain.

Customers will have less time to research the products they buy—but they'll care even more about how they're sourced. —

Doug McMillon

At Walmart, we’ve already found that investments in training, education and wages for our associates have resulted in

higher customer satisfaction. Our customers want our associates to have a great life and they want to see that reflected in

their attitudes and the service they provide.

When it comes to environmental sustainability, retailers and policy-makers face new challenges with the increase in

packaging waste and emissions that comes with the growth of e-commerce. Shipping packages one at a time is not only

wasteful and environmentally unsustainable, it isn’t cost-effective. The demand for convenience will force retailers to come

up with new ways to ship items—in batches vs. one at a time—that are better for business and the environment.

While all these changes pose big challenges for retailers, they also represent unprecedented opportunities to innovate on

behalf of customers and create new job opportunities for retail associates. I can’t think of a more exciting time to be in retail,

to be at the forefront of change and part of an industry that has the potential to provide a better life for millions around the

world.

http://fortune.com/2017/01/06/walmart-ceo-doug-mcmillon-predict-retail-future/

Macy’s Girds for Digital Era

The retailer plans to invest half of the roughly $550 million a year saved from store closures and job cuts into its digital

efforts and other growth strategies

A move announced Wednesday by Inc. to shutter dozens of stores and restructure operations may have as much to do with

digital technology, as it does with lackluster holiday sales, says one tech industry analyst. As CIO Journal reported this

week, the rapid adoption of cloud, mobile, data analytics and other digital capabilities is forcing many nontech firms to

restructure. Among other changes, new IT capabilities are breaking down barriers between formerly siloed business units,

flattening out management structures and streamlining production processes, senior IT managers and industry analysts say.

That’s prompting many companies to adopt new business plans, while redrawing leadership roles and responsibilities

.

Macy’s plans to close 63 stores this spring and cut 10,000 jobs amid a similar restructuring of its operations, aiming to “focus

resources on strategic priorities, improve organizational agility and reduce expense,” the company said in a statement. The

move is expected to save the retail giant roughly $550 million a year, about half of which it now plans to funnel into its digital

business and other growth strategies, a company spokeswoman told CIO Journal.

Further details about strategy would be unveiled next month, when the company is set to report fourth-quarter earnings, she

said.

Earlier this week, it reported that sales declined 2.1% on a comparable store basis in November and December from a year

ago, adding that online sales were strong as a result of ramped up digital efforts. Macy’s had total sales of $27 billion in

2015.

Ted Schadler, vice president and principal analyst at Forrester Research, said companies like Macy’s that embrace digital

technology eventually reach a breaking point and are forced to reorganize. He said retailers that built robust businesses on a

physical presence have spent a lot of energy and money on being in the best possible locations. As such, he added, “their

entire organization – marketing, sales, fulfillment, distribution, inventory management, staffing – is aligned around that

physical presence,” driving their cost structures, management approaches, and technology investments.

But as shoppers increasingly engage these businesses through digital channels, they’re prompting a massive reorganization

that is spreading beyond traditional tech units and into “core systems like inventory, supply chain, distribution, and

fulfillment,” Mr. Schadler said.

Many companies today, from retailers to bankers, insurers and other goods and service providers, are in the midst of

leveraging digital technology to pry legacy systems loose from old business plans and outdated sales channels.

Indeed, back in 2014, Macy’s Chief Omnichannel Officer RB Harrison told CIO Journal that the store was developing a

strategy to integrate its legacy software – including older point-of-sales systems, marketing and inventory management

applications – with software for processing mobile payments, beacon technology, RFID sensors and other emerging digital

technologies.

Among other tools, the company at the time had already adopted Hadoop and NoSQL databases to collect and analyze

purchase data from in-store sensors, mobile apps and its online shopping website. “We will see a lot more organizational to

the broader retail industry.

http://blogs.wsj.com/cio/2017/01/06/macys-girds-for-digital-era/?mod=yahoo_hs

The Limited to Close all Brick-and-Mortar Shops

More grim news for malls as women's apparel designer and retailer The Limited says it will close all its brick-and-mortar stores at the end of this weekend. The New Albany, Ohio, company says it will continue to operate online after the Sunday closures. The Limited made the announcement just two days after Macy's said it would close 68 retail stores and cut more than 10,000 jobs. Sears also announced Thursday that it would close another 150 stores as clothing retailers continue to struggle to compete as consumers increasingly buy online.

Limited Stores, founded in 1963, says it has already ceased operations at several stores in recent weeks and would be offering "highly discounted prices" on merchandise until all its doors close for good Sunday. http://www.chicagotribune.com/business/ct-limited-closing-brick-and-mortar-shops-20170106-story.html

Nordstrom Tech Chief Leaves After less Than a Year on the Job Coming off a bumpy year of layoffs and declining sales, Nordstrom is losing one of its executives.

Chief Technology Officer Kumar Srinivasan, who has only been with the company since March 2016, left Nordstrom as of

Friday.

A Nordstrom spokeswoman said Srinivasan will move back to India to support his family by the end of January.

Nordstrom outlined his accomplishments in reducing complexity and optimizing engineering and software productivity during

his short tenure, including:

Improving supple chain availability and fulfillment

Improving incident management and overall operations

Increasing web and store delivery speed and quality

Better focusing on delivery and innovation

Engineering practices, standards, and cloud optimizations

Seattle-based Nordstrom (NYSE: JWN) is trying to address costs in technology, supply chain and marketing and to drive

top-line growth as it struggles to balance sales from stores and the internet.

Nordstrom expects e-commerce to represent 30 percent of the company's sales in the next 10 years as shopping habits

change. The company has said its efforts to improve profitability have been impacted by this shift toward e-commerce, which

made up only 8 percent of sales five years ago.

The company rolled out mobile offerings last year to address some of those increased costs while driving store traffic, which

includes the Reserve & Try feature of the stores mobile application.

Nordstrom has not named a replacement and said it will evaluate the leadership structure after Srinivasan's departure. The

company is searching to fill or key vice presidents positions in technology. A quick search online shows 96 open positions in

Nordstrom's technology department.

Nordstrom Chief Financial Officer Mike Koppel is also planning to retire this year. He has been in the role since 2001 but will

remain through the spring to support the search for his successor.

http://www.bizjournals.com/seattle/news/2017/01/06/nordstrom-cto-leaves-kumar-

srinivasan.html?ana=e_sea_bn&u=xQeDzsnDNIz7tZRd3rOZapkwQDb&t=1483902662&j=76998191

Former Wal-Mart Executive Hired as Family Dollar President Dollar Tree Inc. announced Friday the promotion of Gary Philbin to enterprise president and the addition of Duncan Mac

Naughton as president and chief operating officer of Family Dollar, which it acquired in 2015.

Mac Naughton, who will report to Philbin, has more than 30 years of experience in the food, grocery, mass merchant and

specialty retail industries. He was most recently CEO of Mills Fleet Farm, but has also held numerous leadership roles at

Wal-Mart Stores Inc. of Bentonville.

"Our focus will continue to be on meeting the everyday needs of our customers – through providing terrific values, affordable

prices, and the right assortment in clean, convenient and shopper-friendly stores," Mac Naughton said.

Mac Naughton was chief merchandising and marketing officer of Wal-Mart U.S. from 2011-14, executive vice president of

Consumables Health & Wellness and Walmart.com from 2010-11 and chief merchandising officer of Wal-Mart Canada from

2009-10. From 2006-09, he served as executive vice president of Merchandising & Marketing for Supervalu Inc. and was

head of the Health & Wellness Division.

Philbin has worked for the company for more than 15 years as president and chief operating officer of Family Dollar;

president and chief operating officer for the Dollar Tree banner; and senior vice president of stores.

http://www.arkansasbusiness.com/article/114907/former-wal-mart-executive-hired-as-family-dollar-

president?enews_zone=3892

Why Advertisers are 'Intimidated' by Marketing Technology

Judy Shapiro, CEO and founder of programmatic content marketing company EngageSimply, doesn't hold back when

talking about the potential she sees with marketing technology. She wants marketers to embrace it, and worries they largely

have not yet done so.

The way she sees it, marketing automation and data are not yet working well for big companies, and it may still be a few

years before things truly click. Before she addresses the Ad Age IQ Marketing and Technology conference on Jan. 17, Ms.

Shapiro shared some of her thoughts on why marketing instincts still matter, even as the marketing technology world

becomes more and more automated.

Advertising Age: If there was one thing you could fix in marketing technology, what would it be?

Ms. Shapiro: I would love marketers to love the technology, and that's really difficult because none of them actually use it.

There's a genuine intimidation. There's just not enough playful experimentation, personal. Instead of marketers doing the

work, it falls to a tech team. There's a joy here, this is fun. I want people to get the joy of the creative aspect of this. You

have now thousands of tools called adtech that are like a crayon box. You can create, and draw and play with them. But

while [marketers] might open up the crayon box and see all of the colors, they get frozen in fear. I would love to see more

personal experimentation. Work with the stuff, play with it. It's not going to bite you. It's not going to hurt you.

Ad Age: Are you seeing creative teams and technology teams work together more closely, or are they still in silos?

Ms. Shapiro: In some of the sharper digital agencies, you absolutely are seeing it. They create core teams and everybody

has accountability for all of the pieces. I'm not seeing it on the client side, not because marketers don't want to see it, but

because you have big CIO teams that are run separate. We're seeing some big marketing teams developing their own ad

ops. Ad ops has never evolved to what it needed to be, because it got overtaken by the CIO. Companies are struggling

more than agencies.

Ad Age: If you were making a hire in this area, say at a smaller agency or marketer, what skills do people need to have now

or for the next five years?

Ms. Shapiro: The best skills are great marketing skills, not great tech skills, believe it or not. Great marketing is a talent, it's

an intuition. Anyone with an open mind can learn the tech. If they have great marketing instincts, that's No. 1. The tech is an

easier skill to learn. Once you dive in, it really is like swimming. You realize how much fun it is. I just would love every

proverbial agency person who is standing on the edge of the pool to just dive in. I won't let them drown.

http://adage.com/article/ad-age-events/judy-shapiro-engagesimply/307393/

AOL introduces BrandBuilder, a Suite of Goal-Based Ad Programs and New Ad Formats

AOL introduced a suite of new ad format programs under the umbrella name BrandBuilder at CES in Las Vegas on

Thursday. The new programs — Director, Buyer and Beta — included in BrandBuilder serve as the starting point for

advertisers based on their campaign goals.

The Director program includes a variety of formats aimed at building brand awareness, while the Buyer program is aimed at

driving direct response actions such as clicks to shop, see store locations or email signups. Rather than cherry-picking

through AOL’s entire catalog of supported ad formats, advertisers start the buying process by selecting one of the programs.

The formats in Director and Buyer can include mobile, video, rich media and desktop and can run across AOL publishers,

including TechCrunch, Engadget, Autoblog, Kanvas, MAKERS, HuffPost RYOT and Moviefone. The purpose is to simplify

how brands and advertisers buy and serve ad experiences.

Beta is a kind of incubator program for brands to collaborate with AOL on new formats. DataPerks and Player Up are the

first two formats to launch as part of BrandBuilder Beta. DataPerks ads give Verizon Wireless customers incentive to take

action on an ad (for example, download a coupon) in exchange for additional wireless plan data. It will be available in the

first quarter of this year in the US. Player Up is positioned as an pre-roll alternative. The first iteration is the result of a

collaboration with eBay and includes short 3-to-7-second video ads shown as bumpers, overlays in place of publisher

watermarks or when a user clicks the pause button. Player Up formats are now available in the US, the UK and Canada.

“Through AOL’s BrandBuilder Beta program, we became an architect and helped shape a truly unique experience that is

less intrusive and more relevant to our consumers. As brands, we’re only as successful as our customers are happy, and

programs like these are what help us continue building a brand people love,” said Olivier Ropars, Senior Director of Global

Internet Marketing at eBay in a statement.

http://marketingland.com/aol-brandbuilder-ad-format-suite-launch-202628

Zillow Lists Region's Hottest Housing Markets, and the Results will Surprise you

If you own residential real estate in West Seattle's Delridge neighborhood, Zillow predicts that the value of your house will

rise more this year than in other parts of the region.

Seattle-based Zillow (Nasdaq: Z, ZG) on Friday announced its predictions for 2017's 10 hottest housing markets nationally

and not surprisingly the greater Seattle region finished second with a forecasted home value appreciation rate of 5.6

percent.

What is surprising are the places in the region where Zillow predicts that home values will rise the most. It's not Medina or

Mercer Island, which respectively are the greater Seattle area's two wealthiest ZIP codes; instead, it's the South Delridge

area, where the company thinks home values will appreciate 7.7 percent.

Three South Seattle neighborhoods – Jackson Place, Rainier Beach and Brighton – and one Eastside area, Northwest

Bellevue, also made the fastest-appreciating list with values anticipated to rise between 7.1 and 7.3 percent.

To rank the nation's top 10 housing markets for 2017, Zillow used three factors: the company's Home Value Forecast, recent

income growth and current unemployment rates. Zillow scaled these variables for the 100 largest markets to come up with a

"hotness" score.

Seattle is ranked behind No. 1 Nashville, which has become a major health care employment center and has the highest

income growth (1.1 percent) of the top 10 cities.

Zillow Chief Economist Svenja Gudell said the list shows that jobs and opportunities are increasing in smaller markets away

from the coasts. These include places like Salt Lake City and Portland and Nashville.

Still, Zillow’s hot list is largely made up of Western cities. Portland reported the strongest home value growth in 2016, with

home values up almost 15 percent over the past year. Housing experts predict that Portland, Seattle and Denver will

continue to outperform the average national home value growth in 2017. Nationally, Zillow expects home values will

appreciate 3 percent in 2017.

Following Nashville and Seattle on the top 10 list are Provo, Utah; Orlando, Florida; Salt Lake City; Portland; Knoxville,

Tennessee; Ogden, Utah; Denver; and Sacramento, California.

http://www.bizjournals.com/seattle/news/2017/01/06/zillow-lists-regions-hottest-housing-markets-

and.html?ana=e_me_set1&s=newsletter&ed=2017-01-

06&u=xQeDzsnDNIz7tZRd3rOZapkwQDb&t=1483720084&j=76991451

With its Subscribers Facebook Group, The Boston Globe is Mining the Stickiest Corners

of the Platform

The Boston Globe’s Facebook page is approaching half a million likes. But for a regional outlet that’s staked its future on

paying subscribers, glancing interest from Facebook users doesn’t then turn into a pipeline for loyal readers and

subscribers.

“We’ve squeezed all the water out of the Facebook page stone — where the pages are great and can generate a ton of

traffic,” Matt Karolian, director of audience engagement at the Globe, said. “But there’s a whole bunch of Facebook that isn’ t

pages, that people use extensively but publications aren’t using extensively. And there’s untapped opportunity in Facebook

groups.”

The Globe’s Facebook group for its subscribers, launched last month, now has around 2,000 members who chatter away in

the group about everything from typos to news stories to the difficulty of puzzles. Moderators approve user posts, but

members are a self-selecting group anyway, and the discussion is civil (“we’ve only not approved a post if it’s spam, or

promotional”). Globe reporters are part of the group, so when their stories come up for discussion — or receive compliments

— the story’s original author can jump right into the comments. People from the customer service team are also on hand to

address circulation issues.

“Even more interesting are just the conversations occurring between the readers themselves,” Karolian said. “You used to

be able to go to a Facebook page [and] write on their wall, but that’s been hidden. This has become a nice way to reignite

reader-to-reader conversation.”

Though a little over a month old and still feeling out the most useful features to offer subscribers, the Globe’s Facebook

group has proven to be remarkably active: An average post in the much smaller private subscribers group attracts about

twice the number of comments as a post on the main page, according to Karolian.

There’s no simple way to match the Globe’s subscriber database with the group’s membership, Karol ian said, but responses

from a Google form survey put up during the earliest days of the project suggests that these subscribers are very involved in

their communities, with most respondents indicating they were “involved in nonprofit/charity work.” The survey also

suggested that those subscribers were most interested in politics, followed by sports.

“As we looked to what work we wanted to do in 2017 as it relates to Facebook, at what kind of new levers on Facebook we

could start pulling, groups seemed a really obvious place for us,” Karolian said. “We could start with subscribers, who we

know to be supremely engaged. Then there are opportunities over time to expand into different areas — could it make sense

for us to do something around Boston sports? Local politics? Weather? Those sorts of things are where we have an

opportunity to help generate and lead discussions around subject matters people care a lot about.”

The group could also be a place to source story ideas or to post large files, in the case of a story with lots of supplemental

documents subscribers may be interested in perusing themselves.

Other publishers have developed Facebook groups for their readers around specific topics such as personal finance or

books. Vox recently launched a closed Facebook group for Obamacare enrollees, which it has both used in its reporting and

as a guide for the types of stories group members are interested in. Karolian said from poking around and talking to liaisons

at Facebook, he was unaware of other subscriber-only groups run by similar-sized papers.

“For publishers who have a paywall, building as much value into the paywall as possible makes a lot of sense, and so far

this group appears to be something of value. We want to be able to create more of these touchpoints for readers,” he said.

“If other metro dailies could go ahead and do this as well, it would help us all have a much larger dataset to understand

what’s successful, what isn’t.”

For now, the Globe’s subscriber group has only been shared as a link with subscribers and hasn’t been promoted

elsewhere, so that the Globe can play around with ideas while the group remains a manageable size.

http://www.niemanlab.org/2017/01/with-its-subscribers-facebook-group-the-boston-globe-is-mining-the-stickiest-corners-of-

the-platform/

Curtains Fall on Arts Critics at Newspapers

For the first time since the Beatles played Ed Sullivan, Boston doesn’t have a newspaper staffer dedicated to the pop music

beat. The city has writers covering everything from Aerosmith to indie rock. They freelance for papers, contribute to online

music magazines, pen posts for radio station websites, and blog. But none of them have staff positions.

The six decades of constant pop coverage ended in July when I left my position as music and theatre writer at the Boston

Herald. Earlier in the year the Boston Globe’s two pop critics left. The Boston Metro, a free commuter paper, eliminated its

local music editor position in 2014. Upstart weekly Dig Boston axed its full-time music and entertainment editor around the

same time. Seminal weekly and perennial arts champion Boston Phoenix, which won a Pulitzer Prize for criticism in 1994,

shuttered in 2013 after half a century in business.

“Boston is a music city, look at how many music schools are here and at the number of people purchasing concert tickets,”

says Steve Morse, a Globe staff critic from the 1970s through the 2000s. “There should be much more coverage.”

Boston is home to the New England Conservatory and Berklee College of Music, which honed the chops of Quincy Jones,

Melissa Etheridge, and John Mayer. Through the great recession, the area’s live music market continued to beat

expectations, and last summer Fenway Park and Gillette Stadium set concert attendance and box office records. If Boston

can’t support pop critics, how can other cities? The short answer: They can’t.

The end of the age of the critic

Critics at newspapers are dying off even faster than print journalism. Theatre critics, film reviewers, A&E editors, and arts

writers of every kind have been stripped from dailies and weeklies around the country. “Nobody can quantify the number of

arts jobs lost because if you’re left at a paper you are probably doing more than one job,” American Theatre Critics

Association chair Bill Hirschman says. “You are covering theatre, writing breaking news stories, doing advance features and

acting as the arts editor all at once.”

Jazz Journalists Association president Howard Mandel sees the same problem in trying to track the slashing of arts

positions. “In some cases the jazz critic is also a copy editor or has some other main job at the paper and covers jazz as a

sideline,” Mandel says.

By his best approximation, fewer than 10 of the Jazz Journalists Association’s 200 members have full-time jobs at

newspapers (down from an already measly two dozen in the mid-’90s). The drop off in theatre critics has been dramatically

sharper. Hirschman said twentysome years ago there were easily a hundred staff theatre critics at papers. Now he “can

count on his fingers” the number of full-timers out of the American Theatre Critics Association’s 220 members. Even film

critics, the marquee A&E position at any paper, have seen their ranks decimated. In 2000, the National Society of Film

Critics had 30 of its 50 members working full-time at dailies and alternative weeklies. For 2016, the numbers have shifted to

10 in 54.

It is sad but expected when the Orange County Register gets rid of its pop critic and music editor, as it did in 2014, but

keeps five people on the OpEd staff. Or when the Denver Post buys out its theatre critic, like it did in 2011, but retains 19

positions in the sports section. But when the papers in New York City—the global center of the arts—abandon coverage, the

trend becomes more troublesome.

The Village Voice, champion of underground culture, spent the last decade showing the men and women who built their

brand the door, including “Dean of American Rock Critics” Robert Christgau. In 2015, the Daily News dropped its TV and

music critics. Even The New York Times, the paragon of arts in print, quietly-but-dramatically scaled back in August when it

ended regional coverage of galleries and theaters. Many in the theatre scene suspect the Times is about to dramatically

reduce its off-Broadway coverage next.

“If what was happening at the Times was a standalone situation it would be bad enough,” Hirschman says. “What worries

me is that mid-sized papers and major metros in other cities see this and say, ‘Oh, well the Times did, we should do it too.’”

Newspapers shift priorities

But papers need to make cuts somewhere. In 2015, weekday and Sunday circulation at dailies fell 7 and 4 percent

respectively, according to the Pew Research Center. These are the biggest declines since 2010 and are truly dire when

paired with an 8 percent drop in ad revenue, also according to Pew. Papers aren’t trimming fat, they’re amputating limbs.

While departments have seen round after round of layoffs and buyouts, arts staffers see their jobs targeted first. It’s not that

the book critic goes before the city hall reporter. It’s that the book critic goes before the guy who covers high school hockey.

The trend echoes the value judgements public schools have made where math classes and the football team stay but the

drama club and jazz band don’t.

“This sports vs. arts argument is one I had constantly during the 25 years I was with Gannett,” New York Film Critics Circle

chairman Marshall Fine says. “I would go to the Toronto Film Festival and see 20 movies in four days, a pretty good value

for the paper. One year they told me it wasn’t cost effective to send me, and yet this was after they just sent a team to cover

a New York Giants game in Europe.”

With their champions banished from papers, legitimate artistic endeavors start to recede from the mainstream

consciousness in favor of fluffy celebrity-driven stories.

“When I got laid off I looked around to see the entire paper has become a kids’ paper,” says Scott Bowles, who worked for

17 years as a film critic and reporter with USA Today until the paper cut about 70 people in 2014. Among those canned were

entertainment reporters and editors, plus three critics including book critic and 40-year-Gannett veteran Bob Minzesheimer.

“I don’t know if it was us chasing the fad or creating the fad, but papers lost their voice of authority to try to cater to youth,”

Bowles says. “It’s all for kids. The papers, the movies and music. There is nowhere to go for smart analysis, beautiful

features. Social media means everyone has a voice but what’s lost in the cacophony is that intelligent voice commenting on

intelligent art.”

What is lost

Thanks to the web, arts writers have plenty of outlets (especially if they are willing to write for little to nothing). Boston alone

has a glut of sites—WBUR web space the Artery, WGBH.org’s extensive arts pages, and online magazines Arts Fuse and

Vanyaland. These destinations gain traction when print gives up on covering the arts.

“We can no longer expect our big regional daily to provide one-stop-shopping coverage of the arts,” Northeastern University

journalism professor Dan Kennedy says.

Blogs and niche arts websites thrive (if not economically, certainly in terms of traffic). But they can do great work, gather

thousands of readers and still not plug the hole newspapers have left by pulling arts pages. Niche sites cater to niche

audiences. They ghettoize content and normalize the notion that a story about a tremendous new rock act doesn’t belong

between a report about a corrupt city council member and a recap of a Cleveland Cavaliers game.

Arts publicists see the scope of the problem with even more clarity than writers. For decades they have used radio, TV, and

newspapers to break clients in new markets. Radio and TV cater to eager fans—people who listen to alternative rock radio

want to hear new alternative rock; viewers who tune into Conan are willing to embrace an unknown stand up comic. But

papers traditionally speak to a wider audience. A writer can compare new roots band Old Crow Medicine Show to Willie

Nelson, or draw a line from Bruce Springsteen to young songwriter Jason Isbell, and suddenly that artist piques the interest

of somebody who only picked up the paper for the box scores or crossword.

“Newspapers are where most investigative journalism originates from, so it’s scary,” music publicist Jim Flammia of All Eyes

Media says. “But it’s also scary for me professionally because I need places for our artists to get covered. My artists make

their money on the road, so regional coverage is more important than national coverage, and that regional coverage comes

from newspapers.”

Flammia, who represents Americana artists such as Old Crow and Isbell, depends more on the Akron Beacon Journal, Des

Moines Register, and Atlanta Journal-Constitution than he does on Rolling Stone magazine to sell tickets. But he and his

fellow publicists struggle to get clients interviews and reviews in newspapers. Bob Merlis, a 40-year-veteran of the music

business, and Nick Loss-Eaton, who started doing PR in 2004, agree coverage has become increasingly hard to secure

when names they have depended on disappear from mastheads.

It’s hard to argue an Old Crow profile is more important than investigative journalism. No movie review or author interview

deserves to run over an exposé uncovering a pedophile priest or a series outlining systematic police brutality. But often

those arts stories are cut in favor of a fantasy football column or gossip item on Justin Bieber’s new gal pal. In an age where

papers survive by getting hyper-local, coverage of a gallery opening or local rock festival is often dismissed for cheap,

generic wire copy.

“When a city loses its critics, there is less news and views about the art form they cover circulating locally,” Mandel says.

“Most often news of lesser-known artists is lost, replaced by news of national and international pop culture celebrities issued

by their publicity machines. … A local critic knows something that is simply irreplaceable about the local audiences and

readership.”

While huge swaths of our culture ignore art in favor of celebrity culture, politics and sports, art matters as much as ever. Old

Crow and Broadway maverick Lin-Manuel Miranda, novelist Donna Tartt and filmmaker Adam McKay change culture in

seismic shifts. They are the culmination of a drive that begins with 16-year-old kids playing all-ages punk shows in

basements and first timers reciting verses at weekly poetry slams (yes, those still exist—Boston has two that have been

going on for nearly two decades). Following these individuals’ stories and success connects us to our communities and our

humanity.

Newspapers should be the ones telling these stories. They should be championing these agents of change from packed

Broadway theaters to cramped underground hip hop clubs, not hiding from them, not pretending they don’t matter or don’t

exist.

http://www.cjr.org/the_feature/arts_music_critics.php

Newspaper Endorsements are Imperiled for the Same Reasons They’re now Urgently

Needed

After agonizing over the editorial for months, The Arizona Republic chose a Wednesday night in late September, with Hillary

Clinton and Donald Trump essentially tied in statewide polls, to back a Democrat for president for the first time in the paper’s

126-year history. The endorsement exceeded a million views online, making it the Republic’s most-read post in two years,

and drew coverage from The New Yorker, The New York Times, and dozens of other national media, plus outlets in

England, Ireland, Canada, Norway, Sweden, Germany, and Japan, some of which sent camera crews. If reach suggests

relevance, then the Republic’s pick for president in 2016 was, in at least one sense, spectacularly more important than ever

before.

Phil Boas, who chairs the paper’s nine-person editorial board, had trouble using his office phone the day after publication

because the lines were so jammed with incoming calls. Some readers thanked him, but many more said the endorsement

felt like “a betrayal.” A powerful op-ed by the newspaper’s president, Mi-Ai Parrish, detailed the death threats and vitriol

directed at her staff (as in residents spitting on teens selling subscriptions door to door). Hundreds of print subscriptions

were cancelled, setting to rest any suspicion that the endorsement was simply a bid for attention.

Editors told me they’ve spent their careers explaining to readers the very simple difference between news and opinion

sections….This type of media illiteracy, however, has as much to do with reader ignorance as with newspapers’ profound

inconsistencies.

For an editor facing such phenomenal animosity, Boas, 57, a longtime Arizonan and lifelong Republican, was strikingly

unfazed when we met at the Republic building in downtown Phoenix this fall. He admitted to writing off Trump’s chances

prematurely after the billionaire’s moral bankruptcy became unmistakable. I asked if it was demoralizing to have, by

underestimating Trump’s appeal, overestimated how much voters prioritize decency. “Trump is not our problem,” he said.

“The problem is that there are millions of people who either cannot discern or don’t give a damn that he is a demonstrably

bad human being. He doesn’t belong near the White House, and it’s so obvious.”

“It may be 10 years before we’re vindicated,” Boas said of the paper’s endorsement decision, “but I’m so proud of what we

did.”

Clinton’s landslide victory on editorial pages—56 of the largest 60 newspapers making presidential endorsements, according

to the American Presidency Project, compared to just eight of any size for Trump—inspired endless takes on how the polls

would be affected.

Politico media reporter Hadas Gold was one of many writing nationally about the Republic’s endorsement. As Trump’s

stunning victory became clear on election night (Clinton lost Arizona, improving just half a point on Obama’s share of the

vote in 2012), Gold tweeted what many were surely thinking: “… newspaper endorsements DO NOT MATTER.”

Throughout the 2016 campaign, many media critics argued that endorsements upset a lot of readers, fail to influence

elections, and, as a result, are likely “going the way of the dodo,” as Margaret Sullivan put it in The Washington Post. With

the glut of election commentary available online, some say dailies have nothing new to offer and would be better off butting

out. That’s become the basis of a popular, cruel contradiction: scolding news outlets for their elitist detachment from Trump

America, while at the same time questioning what veteran editorial writers in Trump America could possibly add that hasn’t

already been said by journalists in New York or Washington.

CJR spoke with opinion editors at more than 20 newspapers across the country, from The New York Times, The Boston

Globe, and USA Today to the Idaho Statesman, San Antonio Express-News, and Ft. Lauderdale Sun-Sentinel. Newspapers

that have permanently stopped endorsing presidential candidates offer declining influence or growing complaints of bias as

justification. When an editorial challenges prevailing local opinion, some readers take it as proof that the paper has lost

touch with its community. For example, a small-town newspaper in Oklahoma, where Trump won every county, is still widely

despised for endorsing Clinton, the Times reported recently. Those readers and others like them reject the notion that

opinion journalists can share their values while opposing their views.

But many editors who spoke with CJR see cutting endorsements as, above all, abandoning an essential community service

because blowback might hurt business, or because papers have slashed the staffs needed for the imposing work that goes

into endorsing. As a candidate, Trump bullied newspapers that editorialized against him. Despite the continuing threat of

intimidation and the staggering hostility toward media that Trump inspires in his supporters, all the editors we interviewed at

papers that currently endorse said they have no plans to stop.

“I’m often perplexed by news articles and columns about endorsements because they assume that organizations like ours

endorse candidates for one reason: to sway votes,” Chicago Tribune Editorial Page Editor John McCormick explains. “If

that’s the metric, then your verdict will be easy to reach: ‘But people don’t pay any attention, it’s irrelevant, half of the people

you endorse don’t win.’ Those clichés are the hardiest of perennials. Swaying votes is only one reason for endorsing, and

arguably not the most important. Every few years, endorsements bring a publication to full stop. They explain to the world

what that publication is, what it advocates, how it thinks, what principles it holds dear.”

Endorsements, he and others argue, are part of a paper’s duty to facilitate dialogue in its community and promote

participation. Moreover, national debate about the need for endorsements usually ignores all but the presidential race;

editors point out that much more labor goes into providing guidance on the rest of the ballot, where local and regional papers

almost certainly have greater impact.

That Trump could lose their support so badly and win the Electoral College so, well, bigly makes it easier to join him in

dismissing newspaper endorsements as impotent antiques. If “matter” means influence, then clearly the victory of someone

The Atlantic called “an enemy of fact-based discourse” reflects poorly on the clout of editorialists, among others. But to

matter is also to be needed—to say otherwise is like witnessing a flu outbreak and concluding that flu shots no longer

matter. As more newspapers are pressured to soften or silence their institutional voices during elections, we should be

specific about why it matters that they continue speaking out.

FIVE WEEKS AFTER DONALD TRUMP DESCENDED the escalator of his eponymous Manhattan tower, warned of

Mexican criminals and rapists, and announced his candidacy, the editorial board of the Des Moines Register called on him

to end “this ill-conceived campaign.”

“As one of the most liberal newspapers in the United States, the poll results were just too much for them to bear,” Trump

responded in a statement. “The Des Moines Register has lost much circulation, advertising, and power over the last number

of years. They will do anything for a headline.”

Trump denied credentials to Register reporters for subsequent campaign events, spurned an endorsement interview with the

editorial board, and still finished a close second in the Iowa caucus. Ted Cruz, the winner, was the other of 11 Republican

candidates who shunned the board. The paper’s caucus endorsement is traditionally coveted, though since 1988, Register

picks have won only four out of 11 times. Its choice this time, Marco Rubio, placed third.

Next came New Hampshire, where the most sought-after endorsement is that of the conservative Union-Leader.

FiveThirtyEight’s Nate Silver found that in six GOP primaries before 2012, three endorsed candidates won the race, but all

six did better in the election than their polling position at the time of the endorsement, improving their standing on average

by 11 percent. Impressive, Silver noted, though hardly proof that the Union-Leader changes the mind of one in 10 voters.

The paper came out early this time for Chris Christie, who had pinned his fate to New Hampshire but was polling at just 5

percent there. Union-Leader editorials are a throwback—the signed opinion of the publisher, Joseph W. McQuaid, who early

on wrote that Trump “insults New Hampshire voters’ intelligence.” When the Union-Leader backed Christie, Trump ranted

about it at a rally for 10 minutes. “Do you know about this newspaper?” he asked the crowd. “This guy’s a bad guy. His

name is Joe McQuaid. He’s a bad person, and he uses his weight, pushes his weight around, thinks he’s hot stuff.” Bowing

to pressure from Trump, ABC dropped the Union-Leader as a debate co-sponsor. Trump won the primary while Christie

finished sixth, with 7 percent. He dropped out of the race the next day.

Most newspapers gave their support in the GOP primaries to John Kasich, or “one-for-38 Kasich,” as Trump mocked the

governor who, by late April, had won only his home state of Ohio. With so many endorsed candidates failing to win, outlets

like the Christian Science Monitor deduced that the primaries “exposed the waning effectiveness of newspapers on public

opinions.” By that logic, everything that seemed to benefit Clinton or Kasich is now exposed as ineffective. But the influence

of any single factor, including endorsements, can’t be measured by whether a candidate wins or loses.

In 2012, 12 percent of likely GOP voters surveyed nationwide by The Washington Post and Pew said they’d be more likely

to back a presidential candidate endorsed by their local newspaper, while 75 percent said it would make no difference. Not

only is self-reported influence dubious, but in this case it’s far too decontextualized. What does it mean for cities with two

papers, one conservative and one liberal? Does “more likely” refer to changing one’s opinion or merely reinforcing it? If

people have been influenced by a year’s worth of editorials, wouldn’t most of their stances be set by the time of the

endorsement?

Two studies are repeatedly cited in the “Do newspaper endorsements matter?” debate. In 2008, Brown University

researchers found that a small percentage of readers might be influenced by an endorsement if the paper backs a candidate

from a party it ordinarily does not to support. A study this past year at Northwestern observed shifts in online betting markets

in response to some presidential endorsements. The latter analysis suffers from all the flaws Silver identified in examining

the effect of Union-Leader endorsements on opinion surveys, but replaces tracking polls with gamblers’ hunches.

Endorsements are not yard signs; one would hope their influence depends, to some degree, on the arguments they make.

Some papers backing Clinton were ebullient, like the Akron Beacon Journal, but many were emphatically unenthusiastic.

Some, like the San Antonio Express-News, detailed the consequences for their region, but many hardly mentioned local

issues. Some, like The New York Times, explicitly spoke to undecided voters, but most avoided that sort of tactical

approach. Some, like the New York Daily News’ 7,900-word Trump takedown, were titanic efforts, but many made no

mention of policy differences on issues like climate change, guns, trade, police brutality, college affordability, healthcare, and

defense. Some offered lively prose, but many were dry.

Attempts to quantify the clout of endorsements treat political discourse as tantamount to advertising. The ripples of a

compelling argument don’t appear reducible to a stat.

MANY PEOPLE RESENT NEWSPAPER ENDORSEMENTS because they don’t understand the standards to which

endorsements are held or what they represent. Editors told me they’ve spent their careers explaining to readers the very

simple difference between news and opinion sections. That confusion alone is enough reason for USA Today not to

endorse, says Editorial Page Editor Bill Sternberg. This type of media illiteracy, however, has as much to do with reader

ignorance as with newspapers’ profound inconsistencies.

On its own, the statement “Our newspaper supports…” is remarkably ambiguous. Some readers might imagine an office

meeting where everyone on staff casts a vote. In reality, “we endorse” may reflect the view of the publisher alone, the

opinion editor alone, a board of a few people, or a board of 16, as at The New York Times. Only some boards require

consensus—the Nashville Tennessean did not endorse a presidential candidate for the first time since 1836 because all five

board members could not agree to support Clinton. Newspapers like the Times observe a strict wall of separation between

the editorial board and the newsroom, so much so that Executive Editor Dean Baquet was grilled on CBS This Morning just

for having sat in on the board’s January meeting with Trump. (“I couldn’t resist,” Baquet finally confessed.) The

Tennessean’s board, meanwhile, includes the executive editor and news director, while the Idaho Statesman’s board

consists of an editor, publisher, and five unpaid community volunteers. Some editorial boards take their stance from

corporate ownership, even if those bosses are hundreds of miles away, while some say their owners have no voice in the

matter.

In other words, “the paper’s views” are really those of whoever is authorized to speak for it. In May, for instance, James

Bennet left the editorship of The Atlantic to become editorial page editor of the Times, where he answers to the publisher

and family patriarch, Arthur Ochs Sulzberger Jr. How did Bennet’s arrival mid-campaign alter the editorial posture of the

Times? “I guess I’m uncomfortable talking about that publicly,” says Bennet, who also serves on CJR’s Board of Overseers.

He did say that during his brief tenure, Sulzberger has never changed the thrust of an editorial.

This election highlighted how many editorial boards remain devoted to a political legacy. When the Florida Times-Union in

Jacksonville endorsed Trump, it explained, “While this is anything but a comfortable call, it is in keeping with the Times -

Union’s center-right tradition and with the conservative Republican philosophy of our family ownership.” Some might expect

a newspaper’s politics to mirror its readership’s, but at the Tribune, which backed Libertarian Gary Johnson, McCormick

says the paper has been loyal for 170 years to conservative values on issues like free trade, not to shifting public opinion.

“It’s very common in our endorsement meetings for someone to say, well, she’s not my kind of candidate but this is our kind

of platform and person,” he explains. “We’ve endorsed candidates that I hope will lose but are right for the Tribune.”

The Arizona Republic—the “Republican” until 1930—promised readers that despite backing Clinton, its conservative bent is

unchanged. Whether editorial boards should be so frank about their politics brings to mind similar questions facing the

Supreme Court. We can view the justices simply as neutral umpires calling balls and strikes, or as people whose decisions

reflect personal convictions. In law and journalism, it’s becoming more obvious that bias is, to some degree, only human.

PART OF THE VIRTUE OF LOCAL AND REGIONAL NEWSPAPERS is that they connect readers with divergent beliefs,

though that ideal may be losing broad support. In 2013, the conservative Supreme Court icon Antonin Scalia discussed his

news diet with New York magazine, explaining that he stopped getting The New York Times and Washington Post when

they grew “so shrilly, shrilly liberal.”

To the interviewer’s suggestion that retreating to agreeable media, in Scalia’s case mostly talk radio, could be “isolating,” the

justice replied that choosing between “those intellectual outlets I respect and those that I don’t respect” was different from

socializing entirely with like-minded people. When pressed, however, he acknowledged that the days of bipartisan dinner

parties in Washington were also long gone. “Geez, I can’t even remember” the last such gathering, Scalia said. “It’s been a

long time.”

The San Diego Union-Tribune endorsed the first Democrat in its 148-year history and, by the end of October, had lost 209

subscribers. At the Cincinnati Enquirer, supporting Clinton initially cost several hundred subscribers. Phil Boas suggested

the Republic’s losses are about double the Enquirer’s, and says they “will hurt a lot.” “I read newspapers that I think are

good newspapers, or if they’re not good, at least they don’t make me angry, okay?” Scalia told New York. As more people

abandon community or regional publications that make them angry, arguing that social intercourse doesn’t suffer looks

increasingly naive.

In the battleground state of Colorado, Hillary Clinton nabbed a mid-October endorsement from The Bear Truth, the student

newspaper at Palmer Ridge High School in Colorado Springs (home of the Bears). Parents in this staunchly conservative

town were outraged. Wrote one mother of two on the school’s website: “I am in complete and utter disgust at this blatant

attempt to sway the minds of impressionable young voters.” What’s jarring is not that some parents are overprotective of

their children, but that nationwide, many adults feel so intellectually vulnerable.

The most common objection to endorsements is that newspapers shouldn’t tell people how to vote, as if offering a

perspective amounts to coercion. Some newspapers actually now avoid using the words “vote for” in their endorsements.

When USA Today deviated from a policy of not endorsing to editorialize against Trump, a former White House

correspondent at the paper wrote to complain that its founding publisher, Al Neuharth, “felt it was elitist to assume we know

better than everyone else when it comes to voting.” But if a newspaper can’t claim above-average knowledge of politics, it

probably has no business publishing.

After the Dallas Morning News endorsed Clinton, the first Democrat it had recommended for president since before World

War II, “the level of vulgarity that came across my desk did knock even me off my chair,” Editorial Page Editor Keven Ann

Willey told CJR. “I’ve never received so many emails with the c-word in it, and allegations that the only reason I supported

Clinton was because she and I have that in common.”

Many Americans have been sold on the malice of journalists. In an endorsement for Clinton, the conservative editorial board

of the Daily Herald, which serves suburban Chicago, addressed them:

Please, we’re your neighbors. We travel the same streets, send our kids to the same schools, worship at the same

churches, feel the same community pride, worry about the same things. We’re not a sinister dark force conniving to move

pieces on a mythical global chessboard. The explanation for our opposition, and for that of almost every newspaper editorial

board in the country, is much simpler—rooted not in conspiracy but in our sense of obligation. For the first time in decades of

elections, we arrive at 2016 to witness the candidacy of a narcissistic demagogue whose election could imperil the country.

If we fail to express that heartfelt fear, we fail in our obligation to you.

DOROTHY JACKS, Palm Beach County’s newest property appraiser, described her intense, hour-and-a-half interview with

the Sun-Sentinel before earning its endorsement. “I know that having [the endorsement] in this day and age is more

important than ever,” she wrote in an email to CJR. “We were able to share it with many more people than just the Sun-

Sentinel readers.”

Fewer Americans may clip out endorsements from the paper to bring to the polls, but for down-ballot races, there simply are

no other media willing to interrogate potential property appraisers for 90 minutes.

Along with drafting a presidential endorsement for readers in their pivotal Florida region, Rosemary O’Hara, the Sun-

Sentinel’s editorial page editor, and her five-member board crafted, sent, and collected questionnaires from 181 candidates.

They conducted 89 interview sessions and spent at least 130 hours in meetings over four weeks and weekends. They made

videos for their six most important endorsements. They moderated three debates, helped with another, and appeared on

radio and TV shows about the election. They produced an 18-page voter guide.

“And we are tired,” O’Hara noted two weeks before Election Day.

She says that in the weeks before the election, she got three or four phone calls a day from voters, mostly older folks, asking

about the ballot. At the Houston Chronicle, which screened candidates for about 75 races, opinion editor Jeff Cohen says,

“Calls from readers wanting a comprehensive list of our endorsements outnumber those who are complaining about the

process five-to-one.”

Please, we’re your neighbors. We travel the same streets, send our kids to the same schools, worship at the same

churches, feel the same community pride, worry about the same things. We’re not a sinister dark force conniving to move

pieces on a mythical global chessboard.”

After their nominations, Clinton and Trump blew off most editorial board interview requests, even in battleground states.

Gary Johnson met with about 20 editorial boards, according to an aide, yet several papers I spoke with said Johnson

squandered an opportunity by not doing more. His decision to not even speak by phone with the Denver Post “was one of

the reasons we decided he wasn’t ready for prime time,” said Editorial Page Editor Chuck Plunkett, whose board had been

open to endorsing the Libertarian. “I can’t imagine why the campaign didn’t take me up.”

Media fragmentation diminishes newspapers’ influence; it also makes it easier to appreciate the value of experienced

journalists with varying views collaborating to provide guidance for their communities. “When we write about issues but no t

the candidates who could make policies we favor come to life,” the Tribune’s John McCormick says, “we look feckless,

disingenuous, timid.”

The challenge is to command respect without condescending (or worse, boring). As Bennet of the Times told CJR, “An

institutional voice in this day and age maybe shouldn’t be quite as pompous—that’s the pejorative term—as Olympian as it

may have been in years past.”

Sitting back in his office chair the afternoon we met, Phil Boas made it clear that when it came to The Arizona Republic’s

decision to endorse Clinton, his conscience was never contingent on the election’s outcome.

When people look back on endorsements warning voters against Trump, they won’t be moved by how many readers were

persuaded or offended, but by the fact that some newspapers took a stand, regardless.

http://www.cjr.org/special_report/newspaper_endorsements_trump_election.php?CJR

Times Joins a Slew of Companies That Can't Crack China

On Wednesday, the New York Times reported that Apple had removed two of its news apps from its app store in China in

late December. Apple spokesman Fred Sainz told the Times that the news apps had been found to be "in violation of local

regulations." He added that, as a result of those violations, "the app must be taken down off the China App Store," and that

they might be restored "when the situation changes."

The Times said it was not given details on what local regulations it had violated, or which authorities had requested that

Apple remove the apps. However, the newspaper noted that the removal of the apps closely followed the publication of a

report detailing numerous government subsidies and other perks afforded Foxconn, the Chinese electronics manufacturing

giant that makes vital elements of Apple's iPhone.

The development was just the latest obstacle faced by the Times in gaining access to China and its potentially lucrative

market of news consumers. The Times' website has been blocked in China since 2012, although residents can sometimes

use virtual private networks (VPNs) and other workarounds to access forbidden sites and content.

But the New York Times' experience also mirrors that of every large Western media or internet service company that has

attempted to establish itself in China.

Facebook and Google—which together form an effective duopoly on digital advertising in pretty much everywhere else in the

world—are non-players in China. Facebook has faced an outright ban in the market since 2009, and Google left the country

in 2010 after bridling at the government's onerous content control laws. More recently, social media newcomer Snapchat

has been blocked from operating in China.

Netflix ended its plans to launch its streaming service in China in October, citing an unfriendly regulatory climate. Instead,

the video-on-demand company plans to license its original content to local, already established players.

And in July, US-based ride-hailing app Uber joined the ranks of Western firms beating a retreat from China when it

announced it would sell its operations there to local rival Didi Chuxing. Uber's strategy fighting a war of attrition for users

against a well-funded Didi proved unwinnable.

In one way or another, all of these Western companies failed to develop an effective strategy to deal with China's tough

regulatory climate, competitive local landscape and differences in culture.

Western firms that want to operate in China face the additional challenge of finding a small middle ground where they accept

China's tough censorship laws and absence of user privacy without sparking criticism from advocates of free speech and

privacy in the West.

Facebook faced such a backlash in November, after the Times reported that it was working on a tool that would allow a third

party to suppress content as a way to placate Chinese censorship authorities.

Despite all of these problems, China still remains an enticing prospect for Western companies. eMarketer projects that there

will be 754.6 million internet users in the country in 2017, with that figure expected to grow to 868.8 million by 2020.

Apple is actually one of the few US company success stories, having amassed a fortune from iPhone sales there. But even

that triumph appears to be a fleeting one, with recent data indicating that demand for Apple's flagship product is falling amid

strong competition from domestic manufacturers.

While the government has allowed Apple to more easily sell its hardware, it has taken a harder tack against its software and

services. Regulators have demanded that the company shutter its iBooks, iTunes and Apple News service, and Apple has

acquiesced to all such requests so far.

As a result of the absence of tough overseas competition, a troika of domestic companies have emerged to fill the void—

among them Baidu, Alibaba and Tencent, known collectively as the BATs. But even these firms have to tread lightly to

ensure they stay on the right side of government regulators who have recently ramped up information control efforts and

scrutiny of large internet businesses under President Xi Jinping.

China may be a market that is already lost to Western players which, even if they could overcome high regulatory hurdles to

enter the country, would now have to battle well-entrenched homegrown firms.

https://www.emarketer.com/Article/Times-Joins-Slew-of-Companies-That-Cant-Crack-China/1014989?ecid=NL1001