NYT reveals “path forward” to doubling digital revenue, emphasizing reader revenue
The Gray Lady seeks to double its digital revenue to $800 million by 2020, mostly be expanding reader revenue through skewing younger and growing its international presence
The New York Times management team yesterday published an 11 page memo that revealed to staff, and to the public and industry, how the paper will try and double digital revenue and succeed financially in the coming years. Our Path Forward (PDF) is based on creating a model that will expand readership and revenue, while maintaining the paper’s editorial quality.
“Our model — offering content and products worth paying for, despite all the free alternatives — serves us in many ways beyond just dollars,” wrote the authors of the memo, which includes executive editor Dean Baquet. “It aligns our business goals with our journalistic mission. It increases the impact of our journalism and the effectiveness of our advertising. It compels us to always put our readers at the center of everything we do.”
The Times memo invents a few straw-men, creating a bit of a “us versus them” setting for what follows in the memo.
Skeptics still openly wonder if we can continue to deliver on this journalistic mission, given the seeming mismatch between the economics of news media and the scale of our operations. They suggest the days when a media company can fund a big, ambitious newsroom are over. They doubt we can continue to cut legacy costs and fund digital innovation at the same time…
Our response is that we are more confident than ever in the path The Times has chosen, and that confidence is grounded in our track record. In less than five years, The Times has succeeded in doubling its digital-only revenues to roughly $400 million last year.
The memo argues that a reliance on reader revenue creates “a more stable foundation” for the media brand, especially in an ad environment where many publishers are seriously concerned about what the impact of ad blockers might have on their overall digital revenue.
The path forward, then, involves four areas which could be paraphrased this way:
- Reach readers where they are
- International focus
- Move to other platforms (Facebook, Twitter, etc)
- Skew younger
To accomplish this, the NYT will test pricing models, improve reading experience, and sell the value of the NYT.
My impression of the memo is that is definitely comes from an editorially focused media company, one that may be overly editorially focused. By that, I don’t mean that there should be a willingness to sacrifice editorial quality, merely that its approach is unbalanced.
This shouldn’t be a surprise, a look at the executives who signed the document shows the revenue side outnumber by editorial two to one. One’s approach to publishing is always influenced from what side of the business one comes from.As a publisher who has been on both the editorial and advertising side (and, yes, also circulation) I am always seeking as broad a solution to any publishing problem as possible. I see the value of quality editorial, reader revenue, as well as advertising revenue.
The NYT document does give a nod towards advertising, but it feels like an appendage to the report.
Does that mean that the NYT’s approach is wrong? Hardly, they have made great strides in maintaining their revenue levels. But Google and Facebook will certainly look at this memo and say a big “thank you.”
“The effort to modernize our service journalism began with Cooking a year ago… With almost five million monthly users, Cooking has been so popular with readers that we are expanding this service approach to other areas starting with real estate, health, and film and television.”
The memo does contain a fair number of interesting news tidbits. As I mentioned above, there is an admission that ad blocking may make digital advertising “ineffective” in the future, for instance.
The memo also places a strong emphasis on mobile, including mobile advertising, calling out their “Mobile Moments” effort. Also mentioned in the ad portion was the NYT’s T Brand Studio, a unit of the ad department, as well as mentioning Trish Hall, who is Op Ed and Sunday Review Editor at Times, for her work on ad/edit collaboration.
Finally, the memo stresses the need for staff reorganization. while reminding staff that learning is an important function of the modern newspaper professional, a call to not to be complacent, rigid, and traditional, at a time when the industry is evolving.