Reader revenue is the future at The New York Times, President/CEO Mark Thompson told INMA’s 2017 World Congress this morning.
“They were smart enough to figure out in 1885 that if you want to produce a high-quality newspaper, you have to charge for it so you can pay your journalists,” Thompson said. “So it’s not that new of an idea, really.”
The Times is just coming up to 2 million digital news subscribers, with around 1 million print subscribers that also have access to digital. There are nearly 300,000 subscribers to the daily crossword.
The single biggest engine to growing at The Times is the process of converting engaged readers into subscribers. The media company’s goal is to reach 10 million paying subscribers — and with its Web site reaching about 150 million uniques every month, Thompson said this goal is completely realistic.
“I think the idea that we should aspire to have 10 million [subscribers] or more is not in any way crazy,” he said. “I think that’s the kind of scale and ambition we should have.”
When asked about the timing of this goal, Thompson said that despite the subscription bump from the United States presidential election in 2016, mapping the exact pace of growth is less important than letting that goal drive the organisation's strategy.
“I think you’d be foolish to predict the pacing,” he added.
With 35 million American Millennials coming to The Times every month, Thompson said the biggest area for growth is not international, but in the United States. Turning those Millennials into subscribers would create an long-term audience base.
“I think we are massively underpenetrated in the United States,” Thompson said.
However, this national focus does not mean The Times discounts the growing importance of international subscribers, who Thompson said have been a steady area of revenue.
“Broadly, we saw that the proportion of new subscribers coming from the rest of the world was staying steady with previous quarters,” he noted. “So, you have an intensely American story, yet we’re actually getting 14% of new subscribers from outside the U.S.”
Providing value to the relationship
In the strategic transformation from world-class news brand to a world-class consumer brand, The New York Times works to meet customer needs and make the brand’s value clear. “This is really about focusing on a relationship between individuals,” Thompson said.
Brand value is also crucial when it comes to the company’s paywall model. The Times had two previous attempts at a paid model before its current, metered model. Even after launching this iteration, Thompson said the company has not stopped tweaking it.
“I think there’s probably not a week going by where we don’t make an adjustment to the model,” he said.
The Times is still learning from the model, but even as a work in progress it is delivering a “significant” amount of revenue for the company. The current strategy is flexible, and is working for today’s audience.
“Our thesis has been quite porous: letting people try and sample you is good for business,” Thompson said.
During the U.S. election, The Times dropped the paywall and allowed free access to all of its content. Yet after putting wall back up, subscriptions soared: “At the moment the paywall went up again, came the biggest surge in subscriptions we’ve seen in the pay model,” he said.
Reader willingness to pay has increased as well. Generation X has a very different mindset than Millennials, expecting more things to continue to be free like they were with the beginning of the Internet. Millennials are different, Thompson noted. They are used to paying for content:“Millennials are more open-minded. They’ve grown up with Spotify and Netflix.”
Digital revenue target
Like many companies, The New York Times is continually reviewing its budget and revenue strategy, Thompson said: “We are a significantly profitable company, and we want to stay that way; but the story for us is always about investment and cost-cutting.”
The newsroom is one particular area of investment, with the Times taking a very different approach than other media companies.
“The stories we are covering demand investment,” Thompson said. “The newsroom today has at least as many people in it as it had 10 to 20 years ago.”
When it comes to digital, the company aims to capture its audiences on all platforms. The Times has created a branded environment with its journalists and opinion writers — one that creates a strong relationship that brings readers to the publisher.
”We have a thesis that we must be a digital destination,” Thompson said.
Part of that digital strategy involves working with platforms such as Facebook. Partnerships with these platforms is a crucial piece to the strategy, and Thompson said he does not understand when publishers complain about the platform: “They seem to me like they’re rather complaining about the existence of the Internet, and not Facebook and Google.”
If digital subscriptions are the future of the company, then mobile is the driver. Print and digital, while a great pair, are not interchangable, according to Thompson.
“You can’t fool yourself that something as big as the palm of your hand can be the same as a broadsheet newspaper,” he said. “You have to think differently. The battle is going to be won or lost on the smartphone.”
Digital drives change at The Times, but sometimes the print teams are the ones driving change — both for print and digital.
“I’ve said to the print teams, ‘Come to me for investment, tell me what we can invest in,’” Thompson said.
One of the suggestions was a printing machine that can create special folds for the newspaper. The print team has also been a big proponent for VR, making the suggestion for sending out Google Cardboard VR goggles. The team also continuously updates the print product.
“We’ve tried to challenge the print team to constantly show us how they can refresh and renew that print product,” Thompson said.
Print or digital audience is at the core of everything The New York Times does. While platforms and technology continue to change, the importance of people does not: “We believe that news is a relationship business,” Thompson said.
Innovation is the only way forward. Experiments power change at the Times, and people power those experiments. Thompson has one piece of advice for newsrooms hesitating to try new things: don’t.
“I think there are many, many publishers who are at risk of potentially failing because they aren’t changing enough,” he said. “I’ve yet to meet a newspaper publisher who is at risk of failing because they’re changing too quickly.”