12 Mar 2017 16:35 IST

‘Our journalism is different from what’s free on the web’

Why digital subscriptions will be the NYT’s growth engine

Michael Golden, Vice-Chairman of The New York Times Co, believes digital is the way to go for media. With 1.8 million digital-only readers for the NYT, Golden emphasises that in the welter of free information online, readers will pay for differentiated content when they see value. The NYT relies on a pay-to-read model as the primary source of revenue rather than digital ad revenue. Golden says that will be its growth engine in the future. He was speaking at a digital media summit in Delhi recently organised by WAN-IFRA, a world association of newspapers and publishers. Excerpts:

NYT’s digital strategy

Our strategy is to develop, quite dominantly, our consumer revenue. Our digital advertising business grew fastest in the first 15 years we’ve been on the web, but now it has become quite challenged. There are lots of competitors, Facebook and Google being two of the biggest and most successful. So we have migrated to consumer pay or digital subscriptions and that has been our biggest growth engine.

On the willingness to pay

It’s a mix. People don’t like to pay for things they can get for free, so what we have to do is show our journalism is different from what’s there for free on the web, that it is more about meaning, context and understanding and less about what happened yesterday. When people find that it adds value they will pay for it. We now have 1.8 million paying us for digital-only access to our journalism. That’s in addition to a million people who pay for our print edition.

Digital vs print ad revenues

It’s smaller; it’s now getting to 28 per cent of revenues. A majority comes from print. Our print business is big and vibrant, though print advertising is declining and we expect it to continue to decline.

Our print consumer business is stable and we think that will continue for a considerable period of time, but our growth is in digital and that’s a bigger piece every year.

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 has been 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.

Differentiated content

We have moved to digital-first so almost all of our journalism goes out on digital, and at the end of the day we have a small team that comes together and picks the best for print. There are some other articles also prepared for print that are summaries of specific items and a few written just for the paper.

NYT’s print business

Our consumer audience and print readership is very loyal so it’s doing well but it’s not a growing revenue. But we continue to invest in print, in magazines, in capabilities to deliver different things to our consumers and our advertisers.

Subscription vs ad revenues

Digital subscriptions have surpassed digital ad revenues; it is the bigger piece of our digital revenue and it’s the piece we can manage best. Digital consumer revenues, what I call the law of large numbers, is literally about millions of subscribers making small economic decisions. Digital advertising is the law of small numbers: a few people making very big economic decisions, and it’s very hard to change their mind when they say I don’t want to use this product but another one.

Why NYT adds subscribers

It’s because of the journalism we provide. We help our readers make sense of a complicated world. We help them solve a problem or often help them understand what it means to them when something happens far away. We also help in routine problems, what they can cook for dinner, what they can watch on TV, we help them make daily decisions in their life. 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.

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