Over a decade ago, the newspaper industry as we know it was on its last legs. Circulation for nearly half of the daily papers in America were dropping by 2-3 percent a year ever since their peak in 1984. It got worse in 2010, when newspaper circulation fell nearly nine percent. Nearly every publication was scaling back and laying off journalists. People feared the disappearance of the fourth estate and the implications this had on democracy itself.
Against that backdrop, The New York Times decided to take the step that “tempted and terrified much of the newspaper industry”. Against widespread skepticism, they decided to charge their customers for the work that they do! Many predicted that readers would just go elsewhere for news. “Successful media companies go after the audience first, and then watch revenues follow” wrote Reuters, “Failing ones alienate their audience in an attempt to maximize short-term revenues”. Ouch. The most optimistic projections had the The New York Times achieving 300K subscriptions in one year, worth $78M a year, a drop in the bucket compared to circulation and advertising revenue from print. A cottage industry even sprung up teaching people how to get around the paywall.
Of course, we now know that the naysayers were wrong. The New York Times hit their first 100K subscribers in the first month. I blogged congrats. It took the gray lady four more years, in 2015, to reach one million digital subscribers, generating $200 million in revenue. I said the The New York Times should be viewed as a tech unicorn.
Fast forward to 2022, and The New York Times has reached 10 million subscribers, ahead of schedule. They’ve clocked in a revenue of $594.2M, with an adjusted operating profit of $109.3M, and subscription revenue of $351.2 million. Oh, and they are now talking about reaching 15 million subscriptions by 2027. Mic drop.
It’s a fairy tale made real, yet nothing about the The New York Times’s success is fictional. You can subscribe to as many music and video streaming services as you’d like, but there are only a handful of international news organizations you’d be willing to pay for. The New York Times’s subscription offerings have found themselves in a position that many other companies dream to be in: they’re indispensable.
How did The New York Times move beyond advertising and into the World Subscribed? The New York Times had a plan: gaining subscribers and offering subscriptions. The New York Times wrote a column to address its readers about the upcoming sub changes. Why? Because its customers (subscribers) are seen as valuable. And they talk. The only way to show them they are valued before they sign up for a subscription, is to make it known that their input will be considered moving forward. And unlike digital publications like Buzzfeed that rely on cheap, click-bait headlines, silly quizzes, and ad revenue, The New York Times model is built on an avid membership base which appreciates true journalistic integrity.
But more than that, like the best subscription services out there, the The New York Times has used pricing and packaging as a key strategic tool to grow – both in subscriber count and revenue. In fact, over the last 10 years, the NY Times has been curating an ever growing, ever evolving portfolio of content. Their year-long plans are also straightforward: $75 for basic digital access to the online articles and app. Want only the physical paper to be delivered to you on weekends? There’s a $10 weekly subscription for that, too.
But they’ve gone far beyond simple news. Puzzles for example. Crosswords were one of the first subscriptions for NY Times, actually launched back in 2008 during the dawn of smartphone apps. They then launched an HTML5 version in 2012, and then took their successful crossword puzzle app in-house by 2014, despite some player pushback. Today, you can subscribe to Games for $40/year, with 6 other games beyond Crosswords.
But wait, there’s more! For those of you who are foodies and like to cook, there’s the Cooking subscription, launched in 2017, priced at $40 per year. If you binge watch and want to understand the entertainment landscape and what the top movies are right now, then you can subscribe to the Watching section, launched back in 2016. If you are old enough to remember the Sunday paper, you’d start to realize that The New York Times is making subscriptions offering out of the various sections.
For sports, The New York Times decided to acquire The Athletic, bringing it another 1.2M subscriptions, along with its own staff and a younger audience. This followed their purchase of Wirecutter back in 2016, which completely shook up the technology review blog industry. The New York Times has since made the reviews site paywalled, offers a separate subscription for $5/month, increased its search engine optimization (SEO), and increased its production frequency. These are real subscription power moves.
Recently, the media company also purchased Wordle, which has millions of daily addicts, including yours truly. Again, it’s going through a similar process: it was acquired, integrated into the website, and will eventually have a version that becomes a paid subscription. But don’t get it twisted. The Times is showing us all a solid cross-sell strategy that is working because its core subscriptions are successful on their own. There is no cookie cutter approach here; good subscriptions are chess, not checkers.
And of course, there is an all-inclusive NYT subscription (the print/digital paper, Wirecutter, Games, Cooking, etc.). It’s $300 for the whole year.
Seen over the arc of the last decade, it’s clear that The New York Times has been slowly transforming from a newspaper, to an online publication, to a media conglomerate complete with technology-focused employees, apps, and new offerings every few financial quarters. Now The New York Times is effectively a tech company, with data scientists working just as fervently as its journalists. And they’ve done an impeccable job orchestrating several services and offerings into one platform, The Times.
So, what can an aspiring subscription business learn from the last 12 years of the New York Times’s amazing transformation? Simply put, if you want to keep up with the times (no pun intended), you need to be flexible and use technology, data, subscriptions, and ultimately, make what the subscribers want your main focus. The New York Times thinks of its customers as subscribers, who have subscriptions, and ultimately, assets to the brand. If you don’t have that sort of hunger for growth and subscriber retention, you’ll be left outside on the doorstep, like an old newspaper.
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Guest Author: Tien Tzuo, CEO, Zuora
This article first appeared in www.subscribed.com
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