How Can the New York Times Survive in a Post-Print World?

TL;DR

The New York Times can improve its prospects in a post-print world by growing digital subscriptions while pursuing consolidation and partnerships with major platforms. Its advertising share fell from 41% to 39% and then 37% of total revenue, while subscription revenue grew more slowly than subscriber numbers. Read on to understand its pricing-power problem, $800 million digital-revenue goal, competitive pressures, and possible buyers.

Transcript

Mark Reeth: We begin with earnings. Jason, why don't we start with the New York Times? We've been telling the same story about newspapers for a while now. Money is heading in the opposite direction. Paper is the way of the past. Print is dead. But, New York Times showing a little spark of life this quarter. Jason Moser: You're going to have some bi... Read More

Key Insights

• 👣 The New York Times has successfully transitioned from print to digital media subscriptions.
• ❓ The company heavily relies on advertising revenue, which is declining.
• 🥅 Achieving the goal of doubling online advertising and subscription revenue by 2020 seems unlikely.
• 🇳🇨 Consolidation in the industry and partnerships with major platforms may be necessary for the New York Times' success.
• 🔉 Warren Buffett or a digital media company like Google or Facebook could potentially acquire the New York Times.

Questions & Answers

Q: How can the New York Times survive in a post-print world?

The discussion suggests continuing the shift toward paying digital subscribers while participating in industry consolidation. Partnerships with major platforms and potential revenue-sharing arrangements could also help the New York Times compete for digital audiences and advertising.

Q: How successfully has the New York Times shifted from print to digital subscriptions?

The New York Times has pivoted away from print and toward digital media subscriptions, with circulation growing in that area. However, subscription revenue is growing much more slowly than the number of subscribers, suggesting limited pricing power.

Q: Why is declining advertising revenue a problem for the New York Times?

Advertising remains an important revenue source, but its contribution is shrinking. It represented 37% of total revenue in the discussed quarter, compared with 39% a year earlier and 41% two years earlier.

Q: Can the New York Times reach $800 million in online advertising and subscription revenue by 2020?

The speakers consider that goal a stretch. The company generated $400 million from online advertising and subscriptions in 2014 and aimed to double it by 2020, but it faced intense competition for digital advertising.

Q: Which platforms compete with the New York Times for digital audiences and advertising?

The discussion identifies Facebook, Twitter, Instagram, Snapchat, and, to a lesser degree, LinkedIn as competitors for digital attention. Facebook is presented as an especially significant rival because the New York Times must compete for advertising on Facebook’s home turf.

Q: Why does the New York Times appear to have limited pricing power?

Paying subscriber numbers are growing, but subscription revenue is increasing much more slowly. The speakers interpret that gap as an indication that the company cannot easily raise the amount subscribers pay.

Q: Why might consolidation help the New York Times?

The speakers view consolidation as the strongest opportunity for companies in the newspaper industry. They argue that joining with another organization could make the New York Times a more attractive investment, while platform partnerships might create beneficial revenue-sharing opportunities.

Q: Who could potentially buy the New York Times?

Warren Buffett is raised as a possible buyer because he likes newspapers, although the discussion explicitly describes this as speculation. The existing analysis also identifies digital media companies such as Google or Facebook as potential acquirers seeking a larger national media presence.

Summary & Key Takeaways

• The New York Times has successfully shifted from print to digital media subscriptions, with circulation growing in that regard.

• However, the company is heavily dependent on advertising as part of their revenue generator, and advertising revenue is decreasing.

• The New York Times aims to double its online advertising and subscription revenue from $400 million to $800 million by 2020, but facing tough competition from large companies like Facebook.