Michael Golden believes readers will pay for good and meaningful content on the web, though there is so much free information online. The Vice-Chairman of The New York Times Company says the newspaper group has seen advertising revenues plunge in the last decade but digital revenues, more so subscriptions — where people pay to read the NYT on the Internet — has been growing, even faster than digital ad revenues.
Speaking at a Digital Media summit in New Delhi organised by WAN-IFRA, a world association of newspapers and publishers, Golden said the NYT is focussed on consumer (subscription) revenue as the main driver: It’s now 60 per cent of revenue while 40 per cent is advertising. That includes its print subscriptions as well. “Just 10 years ago, 70 per cent of our revenue was from advertising and 30 per cent was consumer. It would be nice if advertising revenue stayed steady, but that’s not happening,” he says.
Digital, a revenue-spinner
Explaining the scale of the decline, Golden says the NYT ’s advertising in print declined from $1 billion about 15 years ago to $320 million last year. However, while advertising has dropped, there was a surge in subscriptions, both in digital and print. Last year, the NYT had a little over $250 million in digital consumer revenues in addition to $600 million in print consumer revenues.
The NYT has 1.8 million ‘digital only’ subscribers since it launched its digital subscription plan in 2011. “At that time, most people said it was absurd and it will fail and we will not attract people to pay for digital information. Also, many people, including in the NYT, thought consumers would change from print to pay for digital subscriptions,” he says.
Jump in subscriber numbers
However, events proved otherwise. While a print subscription to the NYT costs $1,000 a year, digital costs $225-425 a year. “People thought consumers would not pay for print but that did not happen, perhaps only to a small degree. My belief is that people don’t see them as substitutable alternatives. Print subscribers will like print and digital subscriptions did not cannibalise our print in any meaningful way,” Golden elaborates, though he does emphasise that the print medium is on a decline in the US. “We would have had declines in print without digital subscriptions. Fifty-five per cent of smart-phone users are under 25 and they are not buying print subscriptions the way 25-year-olds used to. The world is changing in front of us,” he adds.
The NYT is adding 50,000 net subscribers every quarter. In the third quarter of the last year — July to September — NYT had 116,000 net digital subscribers. “That was the biggest addition since we launched the plan in 2011,” he said. In the fourth quarter — October to December — NYT had 257,000 net digital subscribers, more than twice the previous quarter.
“Clearly, there’s a phenomenal increase in interest in the kind of news NYT reports. The way Donald Trump has been speaking about the world has been the primary driver. In times of uncertainty people go to the sources they trust to find out what’s going in the world. We saw the same thing happen during 9/11 and we see it happening now,” Golden says.