November 15, 2017 Last Updated 11:35 am

New York Times Co. CEO sets sights on a future without print

Thoughts on the Nieman Lab interview conducted by Ken Doctor with The New York Times Company’s CEO Mark Thompson, and the company’s ‘subscriber-first’ approach success, and its limits

The Nieman Lab website has an intriguing interview with the CEO of The New York Times Co., Mark Thompson, conducted by Ken Doctor. You can, and should, read the whole interview here (another link will be placed at the bottom of this post).

Thompson became chief executive of the Times five years ago, after having been appointed Director-General at the BBC in 2004. His tenure at the Beeb was rather rocky, which is why some were surprised when he was appointed CEO by Arthur Sulzberger. But five years on there are few executives in the newspaper industry who can show the same level of success in transforming their company as Thompson can.

Although I am an advocate for a balanced approach to publishing, one cannot not deny that the NYT has managed to surprise many observers by continuing to grow its subscription revenue, even as print ad revenue has declined, while also maintaining its head above water. The interview, therefore, examines Thompson’s goals and expectations regarding where the NYT goes using its subscriber-first approach.

In an industry where publishers continue to see revenue falling precipitously, the NYT has managed several pretty good quarters. Though that may sound like a backhanded compliment — several pretty good quarters — it may be the best that could be achieved in the current environment.

What I would point out to TNM readers in the interview are a couple of important points Thompson makes, one of which runs counter to what is being maintained by the print-forever clique.

Asked by Doctor about advertising, Thompson says “So, the thought experiment is: If you set print revenue at zero, what’s your revenue?”

“That’s the idea of decreasing your reliance on print revenue in general,” Doctor responds.

“Or accepting reality, which is that you may well be facing a future where you should set printed revenue at zero, because it will not be a profitable exercise to make it,” Thomson said.

This is a hard thing for many, to accept reality.

While many may argue with some justification that print ad revenue won’t go down to zero at their company, what may be harder to argue against is the concept that print revenue will (or has in many cases) fallen to the point where print is no longer profitable.

This is, by far, the biggest reason why I was a huge advocate for experimenting with digital editions when they arrived in 2010. Printing and distribution costs for digital editions are, of course, zero — then they are offset by costs for creating the digital editions, and losing that 30 percent of revenue to Apple or others.

Unfortunately, many publishers did not manage digital edition costs like they would have print, and found digital editions to not be immediately profitable, then quickly gave up on them — cutting staffs involved in them as they were cutting editorial costs across the board.

Print costs, on the other hand, continue to go up. More importantly, the costs involved in print newspaper publisher has not been one where circulation pays for print production and distribution. Production, distribution and circulation all were seen to be on the cost side of the ledger, offset by ad dollars.

The interview later moves on to the subject of new products, an area I think where the NYT has succeeded far less. The interview does mention the Cooking brand which has over 300,000 subscribers now. But after five years, and with many talented journalists now gone, one would have expected more here.

Not all new publishing brands lend themselves to subscriptions at scale. That is, some cry out for an ad approach. What concerns me about the paid content proponent’s approach is that whenever they employ their model there is also seen am inevitable decline in sale power, sales talent, sales opportunities.

That means that whenever one is creating a new publishing brand, one would necessarily be forced into a corner when working through the business plan. If the new brand cannot thrive using a subscriber model it simply cannot be launched. This is where I feel having a more balanced approach to publishing can be a big advantage.

Still, as a publisher, those quarterly earnings reports (or monthly P&Ls) is where your success is judged. And in Q3 few newspapers had much positive to say, the NYT being a big exception.

Once again, here is the link to the Nieman Lab article by Ken Doctor.

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