How the New York Times Pivoted Its Strategy
Coronavirus has driven a lot of us to consume more news and the New York Times has been one of the media companies best poised to take advantage of that interest, having arguably transitioned most successfully from analogue to digital publishing.
For the NY Times, the transition to digital has been a painful, but productive one. The journey technically began in 1996, with the launch of nytimes.com, but online didn't become a meaningful part of the business until well into the 2000s – with the annual report discussing "digital" much more significantly from 2010 onwards.
The transition to digital wasn't the only major strategic shift the NY Times took. Online advertising was a cyclical and somewhat unpredictable business (it remains so). Therefore, in March 2011 they introduced a "metered paywall" allowing readers access to 20 free articles per month, an allowance they later reduced to 10. That was the birth of their digital subscriptions, which – as you can see by how much they are discussed in their annual reports – has become the bedrock of the NY Times strategy in recent years.
We were surprised in our exploration of this data to see how much "print" is still discussed in NY Times annual reports. But when you look into their most recent financials (2019) in a bit more detail, that makes a lot more sense.
The NY Times now counts 3.5 million digital-only subscribers, more than any other news organisation in the world. They also achieved their goal of doubling digital revenue from $400m to $800m one year ahead of schedule. However, despite all of that success in transitioning, digital revenue still accounts for less than half (44%) of their total $.
It turns out old habits die hard, and print sales still make up the largest portion of total revenue for the NY Times. Of course this is a very simplified view of the economics of their business, as it seems likely that the digital portion of the business would be substantially higher margin, and therefore would represent a larger part of profits than it does revenue. Nevertheless, print is very much a huge part of their business.
This painstaking process undertaken by the NY Times just goes to show how hard local news organisations are finding life in the 21st century. The slow and steady decline of print journalism just got accelerated by COVID-19 and those smaller organisations may still have some time to work out a digital strategy, but the clock is ticking, now faster than ever.
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