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The (Not Failing) New York Times PDF
The (Not Failing) New York Times PDF
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INTRODUCTION
Newspapers used to be great
businesses.
“I can’t think of many other businesses that, if
I just owned one asset over my life, I would
rather own than a newspaper in a single-
newspaper town.”
- Warren Buffett , 1995
- Rupert Murdoch
$90B
$60B
$30B
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
$45B 60M
$30B 40M
$15B 20M
130
65
52 46 37
…the 170-year-old New York Times has not
been spared.
NYT entered the decade struggling to
sustain the same dying business model that
plagued the rest of the industry.
NYT Circulation NYT Ad Revenue
1.2M $1.4B
0.9M $1.1B
0.6M $0.7B
0.3M $0.4B
$2.5B
$1.9B
$1.3B
$0.6B
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
…thanks to a penchant for poor acquisitions
and investments.
Many wondered if the most important
newspaper in the world would survive.
- Michael Hirschorn
Contributing Editor, The Atlantic, 2009
6.5M
Subscribers
1.6M
$0 $756M 10%
Debt Cash & Equivalents Operating Margin
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…with perhaps as much—if not more—upside
than the likes of “market darling” content
platforms like Spotify and Net ix.
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So how did The New York Times do it?
The New York Times
REINVENTED THEIR
PRODUCT
- Ben Smith
NYTimes Media Columnist &
Former Edit of BuzzFeed News
🗞 INVESTED IN CONTENT
📱 INVESTED IN TECH
• The Boston Globe • Golf Digest • WHNT (Huntsville, AL) • Boston Red Sox • WQXR-FM (NYC) • About.com
• Sarasota Herald-Tribune • Golf World • KFSM (Fayetville, AK) (minority interest) • WQEW-AM (NYC) • Donohue Malbaie
• The Press Democrat • Golf Shop Operations • WQAD (Davenport, IA) • Fenway Park (minority (paper manufacturer)
• The Ledger • Golf World Industry • WHO (Des Moines, IA) interest) • Madison Paper
• The Gainesville Sun News • KFOR (Oklahoma City, • Liverpool Football Club Industries (paper mill)
• Santa Barbara News • Golf Weekly OK) (minority interest) • Multiple buildings in
• Spartanburg Herald- • Tennis • KAUT (Oklahoma City, • 80% of NESN, a Manhattan
Journal • Tennis Buyer's Guide OK) regional cable sports
• Wilmington Morning • Cruising World • WNEP (Wilkes-Barre, network that televises
Star • Sailing World PA) the Red Sox & Bruins
• Star-Banner • Sailing Business • WREC (Memphis, TN) • 50% percent of Roush
• Times Daily • Snow Country • WTKR (Norfolk, VA) Fenway Racing, a
• The Tuscaloosa News • Ski Business leading NASCAR team.
• The Gadsen Times • Family Circle
• The Courier • McCall’s
• Daily World • American HomeStyle
• The Dispatch • Child
• Times-News • Fitness
• Daily Comet • Custom Builder
• Palatka Daily News
• Lake City Reporter
• The News-Sun
• Marco Island Eagle
• News-Leader
Or its reporters.
- A.G. Sulzberger
Publisher, NYTimes
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By 2020, The Times had sold all non-core
assets, was debt-free, and had drastically
reduced its pension & retirement liabilities.
Debt Pension + Retirement Obligations
$2.5B
$1.9B
$1.3B
$0.6B
$40M
$20M
$0M
-$20M
-$40M
-$60M
-$80M
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
The balance sheet—once a glaring weakness
—is now one of NYT’s greatest strengths.
“Our fortress balance sheet puts us in a far
better position...not just to weather this storm
but to thrive.”
- Mark Thompson
Former CEO, NYTimes
🗞 INVESTED IN CONTENT
📱 INVESTED IN TECH
- Mark Thompson
Former CEO, NYTimes
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“The single biggest thing we did…was to invest
in our newsroom and invest in our journalism.
And I still think the reason that we've had more
luck than many other news organizations is
because we've invested in journalism; rather
than ring journalists.”
- Mark Thompson
Former CEO, NYTimes
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1,750
1,200
2010 2020
And it’s no wonder…
$42,000 $104,000
Ben Smith Davey Alba Charlie Warzel Maggie Haberman Ken Vogel Sarah Kliff Lisa Chow
Jane Bradley Reggie Ugwu Sapna Maheshwari Jonathan Martin Annie Karni Shira Ovide Elaina Plott
Sheera Frenkel Ginny Hughes Roxanne Emadi Glenn Thrush Dana Rubinstein Kevin Delaney Kara Swisher
Nikole
Choire Sicha Ed Lee Taylor Lorenz Nellie Bowles Bari Weiss
Catherine Porter
Hannah-Jones
- Nicholas Confessore
NYT Political Correspondent
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Blah, blah, ywheel…
TOP TALENT
MORE
READERS
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🧼 CLEANED UP THE BALANCE SHEET
🗞 INVESTED IN CONTENT
📱 INVESTED IN TECH
👩💻
The newsroom was siloed from the rest of the business.
Though The Times employed many people in Engineering, Product,
Analytics, R&D, and Technology, they were walled off from the
newsroom. The result was a weaker digital product.
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Some takeaways from the report…
- Joe Pompeo
Vanity Fair
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In addition to investing in journalistic talent,
NYT has also made notable tech hires from
Facebook, Google, Spotify, Buzzfeed, etc.
Victor Liu Executive Director, Facilities Airbnb/Facebook Lisa Kamm VP of Product Google
Kaitlin Yapchaian Executive Director, Product Apple Michael Reifman Senior Software Engineer Google
Marketing
Dan Schlosser Senior Product Manager Google
Kate Cullinane Senior Product Designer Apple
Emily Harms Data Engineer Google
Jeremiah Via Lead Software Engineer Apple
Dorothy McGivney Entrepreneur in Residence Google
Carrie Levy Creative Director, Partnerships Apple, Airbnb,
Stefanie Lau Program Manager Google
Instagram
Eva Roa Senior Manager, News Product Analytics Google
Anushka Patil Social Strategy Editor Buzzfeed
Alex Rainert Head of Audio Product Google, Foursquare
Emily Fleischaker Enterprise Strategy Editor Buzzfeed
Christian Evans Software Engineering Manager Google, OkCupid
Scott Loitsch Executive Video Producer Buzzfeed
Leah Anton Product Designer LinkedIn
Jessie Wu Software Engineer Buzzfeed
Mel Cone Software Engineer Microsoft
Charlyn Buchanan Software Engineer Buzzfeed
Sarah Klein Software Engineer Microsoft
Gabriel Sanchez Cooking/Food Photo Editor Buzzfeed
Daniel Jacobson VP of Engineering Net ix
Ian M. Creative Engineer Dropbox
Ashley Bohns Customer Care Training Lead Net ix
Tim Nance Senior Engineering Manager Facebook
Christine Lee Data & Insights PayPal
Farah Miller Director of Content Strategy Facebook
Grace LaRosa Product Design Lead Spotify
Arielle Aurrichio Technical Product Manager Facebook
Lindsay Fischler Brand Director, Audio, TV & Film Spotify
Mollie Vandor Product Director Facebook
Ben Smithgall Interactive News Developer Spotify
Evan Maeda Lead Product Designer Facebook, Lyft
Aliza Aufrichtig Graphics/Multimedia Editor Spotify
Issara Paoluengtong Product Manager, NYT Cooking Facebook
Manish Nag VP of Data + Insights Spotify
Darun Kwak Product Manager, NYT Cooking Facebook
Devon Meyer Senior Product Manager Square
Dan Sanchez Editor, Emerging Platforms Facebook
Jonathan Knight General Manager of Games Zynga, EA
Alexandra Hardiman Head of Product Facebook
Jon Tien Head of Engagement Zynga
Jake Grovum Social Strategy Editor Financial Times
fl
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NYT added Directors to its board with digital
experience…
#1 Ranking
…and an extremely
easy, user-friendly
signup, payment,
and login ow.
one-cli
ck
payme
nt
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🧼 CLEANED UP THE BALANCE SHEET
🗞 INVESTED IN CONTENT
📱 INVESTED IN TECH
- Mark Thompson
Former CEO, NYTimes
C R O S S W O R D
G
A few years ago, The Times spun off their
Cooking and Crossword offerings into
standalone products; meaning people could
subscribe to either without being a NYT
subscriber.
1.3M
1M
0.6M
0.4M
0.2M
0.2M
$50M+
- Mark Thompson
Former CEO, NYTimes
fl
NYT has teamed up with + on a
monthly video documentary series called
New York Times Presents.
Subscription
25%
Other
8%
Today, those gures are reversed.
Advertising
17%
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“We are convinced that our advertiser-
supported, no-fee registration model, which
has worked so well for us...is the best path.”
- Martin Nisenholtz
NYTimes SVP of Digital Operations, 1998
$171M
$160M $182M $197M
$209M $238M $259M
$541M $260M
$507M
$480M
$442M
$372M
$320M $299M
$270M
- Mark Thompson
Former CEO, NYTimes
5.7M
4.4M
3.4M
2.6M
1.9M
1.3M
1.1M 1.1M 1M
0.9M 0.9M 1M 0.9M 0.9M 0.8M
0.6M 0.8M
0.4M
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020*
‡Includes Cooking & Crossword Subscribers
*H1 only, so full year #s likely to be much higher
This is 4X its print-era peak. No other
publisher has had anywhere close to the
same success.
2002 Print Circulation 2019 Digital News Subscribers
1.1M
The New York Times 4.1M
268%
0.7M
The Washington Post 1.8M
148%
1M
Los Angeles Times 0.2M
82%
0.7M
New York Daily News 0M
96%
0.6M
Chicago Tribune 0.1M
84%
0.6M
Newsday 0M
96%
0.6M
Houston Chronicle 0M
93%
0.5M
The Dallas Morning News 0.1M
86%
0.5M
San Francisco Chronicle 0.1M
89%
46%
39% 1.2M
1M
28%
26%
0.8M
21% 22% 0.8M
20% 0.7M
19%
0.2M
0.2M
0.1M
2013
2014
2015
2016
2017
2018
2019
*2020
2013
2014
2015
2016
2017
2018
2019
*2020
*H1 only, so full year #s likely to be much higher
It turns out millions of people are willing to
pay for high-quality, well-researched
journalism.
Analyze churn/retention
“We continue to run a test that deliberately bifurcate subscriptions at promotion expiration with approximately half
moving to full price, while the others are moved to an intermediate step-up price. The goal of the test is to identify
characteristics that might indicate whether a subscriber may be more price-sensitive and, therefore, may require
Roland Caputo additional engagement with our product before moving to full price.”
CFO
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“The journalism is the foundation, but it’s the
digital business infrastructure built atop that has
propelled [NYT’s] success.”
- Ken Doctor
By adopting the strategies and digital know-
how of Net ix, Spotify, Tinder, and Hulu,
NYT has remade itself into a subscription- rst
company.
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And that’s good news, because the
subscription model is superior to the ad
model by almost any measure.
Ad Model vs. Subscription Model
Ad
s Advertisers Op
y era
rapp tio
C ns
Cra
pp
y$
Readers
Crappy reader High quality
experience journalism
👎 Advertisers don’t care about the quality of the content as much as readers do
👎 Ads suck. They make the product ugly, and slow down the website/app.
Good $$$
Paying
Subscribers
Great reader High quality Operations
experience journalism
👍 Self reinforcing
2019 Q3
Subscription
2018 Q4
2018 Q1
This shift in focus is re ected in earnings
2017 Q2
2016 Q3
2015 Q4
2015 Q1
Advertising
2014 Q2
2013 Q3
2012 Q4
2012 Q1
100
90
80
70
60
50
40
30
20
10
2019 Q3
Churn/Retention/Engagement
fl
2018 Q4
2018 Q1
2017 Q2
2016 Q3
2015 Q4
2015 Q1
2014 Q2
2013 Q3
2012 Q4
calls.
2012 Q1
35
30
25
20
15
10
5
# of Mentions
To achieve its goal of turning readers into
paying subscribers, NYT invested heavily in
its core product, and the infrastructure to
support it.
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The New York Times
HAS STRONG FINANCIALS.
Subscriptions Digital Subscriptions to digital products, such as News, Crossword, and Cooking.
Advertising Digital Advertising on NYT website, apps, and email. Also includes creative service
fees, podcast advertising, ads on Wirecutter, and classi eds (e.g., real
estate).
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Subscriptions | Digital
↗
growing fast (both in terms of
revenue and # of subscribers);
the economics are great; and
there’s lots of room to add to
their 5.7M subscribers. It will 5.7M 4.4M 22%
Total Digital Subscribers News Subscribers Δ Sub Growth
soon be the company’s largest
business.
Subscriptions | Print
840K (4%)
To offset circulation declines, Most Print Subscribers Δ Print Sub Growth
NYT has raised prices on Pro table
existing print subscribers; as a
result, ARPU has increased
while revenue has stayed at.
Segment
↘
$723 7X 7%
Print ARPU Print ARPU vs Digtial Δ Print ARPU
With 840k print subscribers,
↗
NYT makes approximately
$723 per print subscriber.
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Advertising | Digital
Advertising | Print
↘
today the business is in terminal
decline.
Other
↗
ve years.
So in summary:
A decline in print …has been offset by
advertising… digital sub growth. Print sub revenue is at.
$800M
$600M
$400M
$200M
$1.5B
$1B
$.5B
fl
fl
NYT’s at total revenue masks how
much the business has fundamentally
changed from ad-supported to
subscription-supported.
That’s because…
BETTER
JOURNALISM
“You invest in great content,
you make it attractive to
users, you make it easy for
those users to subscribe,
BETTER you get more and more MORE
PRODUCTS subscribers and that
enables you to invest in
SUBSCRIBERS
more great content.”
— Mark Thompson,
Former CEO, NYTimes
MORE PROFIT
ue
e n
$ ev
l R
ti a So as NYT adds
D ig more subscribers,
pro ts and
Break-even margins should
point swell.
NYT is here
Variable Costs
Fixed Costs
Content Costs
# of subscribers
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“Our view is that over the next few years, we’re
going to see progressively improving operating
leverage. I can’t tell you…when all the effects
play out completely, but it’s not far away.”
- Mark Thompson
Former CEO, NYTimes
fl
But in some ways, NYT’s model is
superior* to other digital subscription
businesses because…
NYT spends less on content, both in
absolute and relative terms*.
$14B 75%
69%
45%
$5B
$0.8B
$ $ $
nue nue nue
ve ve ve
Re Re Re
Spotify doesn’t own the songs Net ix owns most of the video it NYT creates and distributes its
they distribute, so they must pay distributes, but video is very own journalism, and the primary
a per-stream royalty to labels and expensive to produce/acquire. cost of creating it is simply
songwriters. This makes it hard to Video also has higher streaming/ paying salaries for 1,750
grow pro ts at a faster rate than bandwidth costs, which increases reporters and 700 engineers.
revenues and subscribers. with volume. Variable costs are lower than
Net ix and Spotify because text
is far cheaper to distribute than
music or video.
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fl
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And NYT has weaker competitors*.
Spotify competes directly with Net ix competes directly with NYT has few competitors.
some of the largest—and most the same companies as Spotify,
cash-rich—companies in the plus Disney + Hulu, HBO + They have more digital
world: Google, Amazon, and AT&T, Showtime, Starz, Quibi, subscribers than WSJ, The
Apple. CBS, NBC, etc. Washington Post, and 250
local Gannett papers—
combined.
- Mark Thompson
Former CEO, NYTimes
- Mark Thompson
Former CEO, NYTimes
10M
9.2M
8.4M
7.6M
6.7M
5.9M
5.1M
> 50% 🧍🧍
Well over half of 25% of subscribers Healthy growth in Readers no longer
all US adults visit in the most recent other markets like skew male.
NYTimes.com each quarter were Canada, Australia,
month. And NYT international (18% UK, India,
now reaches more of subscribers Southern Europe,
than 1 in 2 US overall). and Texas.
millennials (up
from 1 in 5 a few
years ago).
NYT is meeting this demand by opening new
international bureaus, and investing in its
existing ones.
And that in turn enables NYT to cover more
of the world. Which then attracts more
subscribers, which then…(you get the point)
750
500
250
2007
2009
2011
2013
2015
2017
2019
“The New York Times is in the midst of a
transition from a newspaper for the New York
region, to a digital news resource for the entire
world.”
- Jake DuBois
BlueHawk Investors
- Mark Thompson
Former CEO, NYTimes
30M
subscribers in ????
6.5M
subscribers in 2020
1M
subscribers
in 2011
💰💰💰
$70 $0.4B $0.7B $1.1B $1.4B $1.8B $2.1B
💰💰💰
Other Revenues Expenses
Print subs and advertising, Mostly xed
$110 $0.6B $1.1B $1.7B $2.2B $2.8B $3.3B digital advertising, other
NYT
Today
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CONCLUSION
A decade ago, NYT was a dying
business like every other newspaper.
4x Subscribers 28%
Print-era peak YoY Sub Growth
6.5M
Subscribers
🧼
Clean
Balance
Industry-leading tech Sheet Virtuous Cycle Few competitors
thriving
@MineSafety
https://www.MineSafetyDisclosures.com
THE END
@MineSafety
https://www.MineSafetyDisclosures.com