[1]

PAYING THE PIPER

Mark Thompson, Friday 6th September

My topic this afternoon is ‘rethinking the economics of newspaper

journalism’ but, before I jump into that, I do have two rather large

health warnings to get off my chest.

For a start I’m something of a first year student of the economics of

newspaper journalism. November the 12th 2012, in the centenary

year of the sinking of the Titanic, was the day I chose to climb aboard

the newspaper industry. That means that I now have precisely nine

months and twenty-five days experience to my name. Fortunately I

do know a bit about journalism and about digital, and my new

colleagues in the Times building back in New York City have been

helping me to fill in the missing pieces. Nonetheless I stand in front of

this audience with a real sense of humility.

The second warning is about the applicability of what I do now know.

A few days after I started at The New York Times, the Tow Center for

Digital Journalism at the Columbia Journalism School published a

splendid doorstop of an essay called: Post-Industrial Journalism:

Adapting to the Present. Great, I thought, this is just the kind of how-

to manual I’ve been looking for. Then I got to page 17. The New

[2]

York Times, it says, is in a ‘category of one’, and ‘any sentence that

begins “Let’s take The New York Times as an example …” is thus

liable to explain or describe little about the rest of the landscape’.

[T]he choices its management make, and the outcomes of those

choices, are not illustrative or predictive for most other news

organizations, large or small, old or new. We will therefore spend

comparatively little time discussing its fate.

So whatever I have picked up over the past few months may not be

of much use to anyone else anyway.

But just before you start gently sidling towards the exit, let me tell you

what I will try to do over the next half an hour. Arthur Sulzberger, Jr.

and The New York Times Company hired me as a fresh pair of eyes,

someone from a different country and a different – though in some

ways, maybe not-so-different – industry, and one of the things I want

to share with you today is what I’ve seen with that fresh pair of eyes

over the past nine months.

And I’m going to take that stern warning, from Messrs. Anderson and

Shirky and our own Emily Bell, about the non-applicability and non-

transferability of the experience of The Times, with a generous pinch

of salt.

The Times is unique, today more than ever. It has unique

opportunities and, in both its readers’ and its owners’ minds, unique

cultural obligations and journalistic ambitions as well. But it is still a

news provider and the same behavioural, technological and

[3]

commercial forces of change that are playing on other news providers

play on The Times too. When it comes to newspaper economics, if

you prick us, do we too not bleed?

So forgive me if my every other sentence begins, ‘Let’s take The New

York Times as an example.’

And there’s another question I’d like to worry away as we explore the

future of newspapers this afternoon: Why did Jeff Bezos buy the

Washington Post?

Some claim that he clicked on it by accident, others that, from now

on, the Post will deliver the news in three to five business days, but

I’d be careful about dismissing the purchase as a rich man’s whim or

a piece of pure altruism.

Even if we don’t know the real answer, and I certainly don’t bring any

special inside knowledge to the table, we should still ask ourselves

why one of the world’s most imaginative and brilliant entrepreneurs

decided to buy the Post – and whether, at a time of so much anxiety

and pessimism in the industry, he has seen something that the rest of

us have yet to spot.

Indispensible still

On April 15 this year I was in The New York Times newsroom with

our Executive Editor, Jill Abramson, and her team, as the 2013

[4]

Pulitzer Prizes were announced. Quite a crop for The Times and a

real tribute to Jill’s first full year at the helm, the prizes closely

mirroring her particular ambitions for the newsroom: innovation in

digital story-telling with Snow Fall, an undiminished commitment to

large-scale enterprise (or investigative) journalism with the i-Economy

story. Another winner, David Barboza’s brilliant investigation of the

Wen family, illustrated something else – the willingness, not just of

the newsroom but of the whole company, to put out revelatory

journalism in the public interest, irrespective of the commercial

consequences. Our Chinese website remains blocked to this day.

As we were cheering the winners, another piece of news abruptly

popped up on the monitors, the bombing of the Boston Marathon, and

within seconds this terrible new unfolding story became the sole

focus of attention. One New York Times staffer had run the race

himself in a very fast time and made it to his hotel room – only to get

a call to tell him to run straight back to cover the story.

But, just like the Pulitzers, Boston also points to something important

about the present and future of news journalism. Once, and not so

long ago, different papers, TV channels and news websites competed

for who was going to be first with the really big breaking story. Now

we know in advance where that story’s almost certainly going to

appear first – Twitter and sites like it. They usually beat us all.

And yet the problem with Twitter is you don’t just get the news, you

get everything else as well: uncorroborated but potentially precious

eye-witness testimony and citizen journalism, but also rumour,

[5]

speculation, disinformation, propaganda, lies and general nuttiness.

Just a few years ago, it was sometimes suggested that the world’s

professional journalists might well soon be replaced by a kind of

Wikipedia of news, reported and curated by a global army of publicly-

spirited amateurs. But quite apart from issues of political and cultural

bias and objectivity, it turns out that what we face in a major unfolding

hard news story is a vast, roiling sea of actuality, with fresh breakers

crashing in every few seconds and with both truth and narrative often

fiendishly hard to pick out.

In these circumstances, great professional reporting and editing skills

and great journalistic values aren’t obsolete, they’re more important

than ever.

Jill, Dean Baquet our managing editor and members of the masthead

were in the newsroom pretty much round the clock that week, not to

second-guess the mechanics of the coverage but because in the age

of Twitter, classic editorial standards – about sources and fact-

checking and balance and only going with something when you’re

sure – are at even more of a premium than they used to be.

What I thought was interesting about Boston was the way in which,

given that this was a major domestic US story, the news blogs – The

Times Lede blog, though I was also following the Globe, the Guardian

and, yes, the BBC – outpaced cable TV news. In these live blogs, we

and others are developing a fluid, characterful, mixed-media, rather

Snow Fall-like way of guiding the reader through a momentous,

frightening, perplexing real-time event. Sharing some of the as-yet

[6]

unconfirmed reports and stories. Aggregating and curating what

other media outlets are saying; but always being very clear about

what we know and what we don’t; and all of it underpinned by

outstanding story-telling and editing. And for me – though I’m sure

others will say it happened far sooner – Boston was the story where

conventional linear TV got overtaken, and where some of their efforts

to keep up went horribly awry.

Another assumption from a few years back was that newspapers

could no longer compete with hard news, that their role – if indeed

they had one – would increasingly be in the realms of analysis,

context and comment. But, although those are all important and,

indeed, are all areas of great strength for The New York Times, this is

another prediction which now looks questionable.

In the world of Twitter, Timesian accuracy and authority are precious

when it comes to big breaking news. And, along with others, our

newsroom is rapidly innovating in the ways it tells these stories on the

web and smart-phone – because, as Boston showed with more than

50% of all digital traffic coming from phones – it is on smart-phone,

more than the web, more than tablet, more one day soon perhaps

even than TV, that the sharp edge of these really big stories will be

consumed.

Investigative journalism. Authoritative comment. Narrative

innovation. Major Breaking news. We might add serious, in-depth

international reporting.

[7]

My first broad points are that, despite seemingly overwhelming new

competition, the journalism that serious newspapers do has retained

its saliency and indispensability, and that we are currently seeing

more journalistic and creative digital innovation from them than we

are from either the tabloid newspaper world or the broadcasters.

And despite sometimes brilliant work on the web and TV, it’s

interesting how often even today it’s the world’s great newspapers

which are in the thick of the most difficult and most controversial

journalism. A perfect example of that is the work done this year by

the Guardian and the Washington Post on the Edward Snowden story

– a story on which, as you saw the first evidence of yesterday, The

New York Times is also currently engaged.

Indeed, some of the forces at work elsewhere in the news

environment are making what we do more distinctive and

indispensable. The turning-away of much of the rest of US news

media – across print, TV and the web – from thorough international

reporting and all the costs associated with it means that, in terms of

outstanding American professional journalism about the rest of the

world, faces less competition than it did ten, or fifty years ago.

The challenge is making it pay.

The advertising challenge

[8]

This chart shows the two main revenue streams of The New York

Times and how they’ve changed over time, advertising in red and

circulation in blue. And you can see that in 2012 we hit an inflection-

point when circulation revenue overtook advertising for the first time.

I’m going to talk about advertising first: its past and present, but most

importantly how we think about its future.

The Columbia Study of Post-Industrial Journalism uses the word

‘subsidy’ to describe the historic model whereby advertising revenue

paid for quality journalism. I’d rather use the more neutral, and I think

more historically accurate term, indirect revenue.

The word ‘subsidy’ brings us right up to the present and the dilemma

of what kind of private or public business model can be found to

support what we take to be a social and cultural good. Actually,

Adolph Ochs, who bought The New York Times in 1895, and owners

like him thought about things in a very different way.

Ochs believed passionately in the social and cultural value of

journalism, but he also thought he could make a lot of money out of it.

Over time, it became clear that indirect revenue – from advertisers

willing to pay to get their messages in front of the readers of The

Times – might actually deliver more dollars than direct revenue, in

other words from sales and subscriptions. Moreover, the more

readers you had, the more you could charge advertisers, so it might

make sense to set the price of the newspaper low to optimise reach.

[9]

As a result, a given reader might well be able to buy a copy for less

than it cost to produce and, in this narrow sense, yes it was a subsidy

model from the point of view of the end-user. But in fact it was just

the optimal business-model for the time and remains the preferred

model for many of the world’s newspapers and the vast majority of its

news websites and apps today. In digital, most players set the price

of access, the equivalent of the per-copy price, at zero and aim to

monetize by maximizing reach and then selling that reach to

advertisers.

All that has happened since Adolph Ochs’ day is that competition has

changed the profile of advertising demand and therefore the

publisher’s pricing-power. Many of America’s major quality

newspapers enjoyed near monopoly power in their advertising

markets and were able to price accordingly. The Times faced quality

competition for much of its life as a New York newspaper and still

does today as a national physical newspaper from the Wall Street

Journal. But intense demand from advertisers meant that historically

it too could charge premium prices.

And it still does today across many categories. But, as the chart

shows, from the middle 2000s onwards, advertising demand in some

categories began to shift to the internet.

Let’s bring it to life. In the year 2000, Help Wanted – classified job

ads in the physical New York Times – brought in $204 million in

revenue. Last year, 2012, the figure was $13 million, a 94% fall. A

further challenge is that print advertising is very high margin: a dollar

[10]

of revenue delivers 90 cents of profitability. So big top-line falls in

categories like Help Wanted also put immediate pressure on the

bottom-line as well. It says something about the fundamental

resilience of The New York Times as a business that it could absorb

shocks like that and still make very healthy profits as it does today.

Although we’ve seen stabilisation in some categories, some of the

structural pressures at work on print advertising remain and we’ve

continued to see net declines, though at a less dramatic rate than

around 2008. Success in digital advertising also served to moderate

the angle of decline of the red line from what it might otherwise have

been.

But we need to be clear-eyed about digital advertising too. This is a

market which is itself rapidly maturing and changing. Agencies and

clients want what they’ve always wanted, impact and engagement –

but now they are particularly looking to video and multimedia, ad unit

innovation and customization, and advertising which readers

encounter within rather than alongside the news-flow. More and

more of them also have ambitions to present their own content to

users, not just simple visual messages and marketing copy, but

longer, more complex ideas and information.

These last two impulses have led to the rapid rise of so-called native

advertising – advertising which, taken to the extreme, can be more or

less indistinguishable from the journalism that surrounds it, not just

blurring the line between church and state, but deceiving the reader

[11]

and potentially leading to disasters like The Atlantic’s unhappy

sponsored blog about the Church of Scientology this January. At The

Times, we will never sell that kind of native advertising or take any

risks with that clear boundary between journalism and marketing.

That doesn’t mean that all forms of branded content are impossible

however – the physical New York Times, after all, has been running

advertorials for years.

But the effect of all of these dynamics is shifting demand rapidly

towards video and new kinds of digital advertising and away from the

traditional banner display ad. Programmatic buying – in other words,

the machine-to-machine real-time auctioning of ads – is also growing

swiftly and exacerbating the downward pressure on price, as is the

ability of agencies to use data to find the readers of premium digital

news on other sites which may charge them a fifth or a tenth of the

price to serve the same ad to the same reader.

Beneath all of this is a fundamental economic point. The digital

advertising market is vast and all the world’s news publishers, even

the largest, are minnows in it. Overall monthly impressions have

been growing far faster than marketing budgets in most of the

developed world and that supply-demand imbalance has had its own

effect on prices. But in the general digital advertising market, pricing-

power lies with the really big players, the Googles and Facebooks,

with their billions and billions of impressions. If you are competing

with general display advertising, you will find that even a hundred

million unique browsers a month, an amazing achievement in terms

of reach and user-impact, converts into surprisingly few dollars or

[12]

pounds. The structure of the market means that that is unlikely to

change.

None of this means that we are giving up on digital advertising at The

Times – far from it. We believe we have great scope to develop our

high-end custom business and to offer advertisers the most creative,

immersive solutions on the market. We’re excited about video:

we’ve doubled video impressions in the first half of this year and have

seen video advertising revenues grow by more than 200%. We’re

convinced that we can use our own data and programmatic buying

much more effectively to make our valuable audience available to

advertisers for the best price at every point in the market. And we’re

combining our US and global sales force into one team. We have a

new head of advertising, Meredith Levien, and her task is to use

these and other means to restore our digital advertising revenue to

growth, as well as to stabilise and, where possible, find growth

through innovation in our print advertising platform.

But – and I can’t speak for others, just for The New York Times – we

are skeptical about whether digital advertising on its own will ever be

a sufficiently large and secure revenue stream to support a large-

scale quality news operation.

There is nothing wrong with indirect revenue as such. Once

advertising was more than 80% of The Times’s revenue and it paid

for the newsroom for decades. It still supports much of America’s

and the world’s TV production, including TV news – though in the US

[13]

there too, structural shifts in competition have led to a downward

spiral in ad revenue and investment in journalism.

In the glory days of print advertising, publishers like Adolph Ochs

enjoyed a supply-and-demand advantage and a pricing-power which

can never be replicated in digital. We want to drive advertising

revenue as hard as we possibly can. But we also know that, for The

Times, growth – growth in revenues and growth in profitability – will

not come from advertising alone.

The not-so-thin blue line

And that brings us to the other line in my chart, the blue line for

circulation revenue.

Now the circulation story – pricing, newsstand sales, historic print

subscription traditions, current digital subscriptions – really does vary

widely from market to market and the trends feel less universal than

those in advertising. I accept therefore that our strategy at The Times

could never be applied in its entirety to other papers in the US or

elsewhere. Nonetheless I believe that the philosophy is interesting

and potentially, at least in part, of use to others.

[14]

As you can see, circulation revenue has actually grown in recent

years and now contributes over $800 million, or more than half of the

company’s revenues. Indeed The New York Times today has the

highest paid circulation in its 160-year history with close to two million

paying subscribers to physical and digital copies.

Again, price and pricing-power are key. Some three decades ago,

The Times began to move from the pure advertising platform model –

low price, maximum reach – towards a more blended approach with a

cover price which reflected the value to readers of the paper, and was

the highest in the market. There was also a systematic effort to build

the number of home subscribers.

Reach was still important to the overall economics of the company,

but the Times was able to build it in a different way – by transforming

itself into a genuinely national newspaper, printing across the USA,

attracting readers and subscribers across the country, selling truly

national advertising. The Times was already America’s best-known

newspaper but this move turned that cultural prestige more effectively

into revenue and also provided the best possible launch-pad when

digital came along. To state the obvious, the different destinies of

The New York Times and US metro newspapers – the Washington

Post and, indeed, the Boston Globe among them – stem from this

national pivot.

The New York Times invested relatively early and aggressively in

digital and quickly became one of world’s leading news sites. There

[15]

were a few experiments with pay, but for most of the first decade and

a half of digital, the prevailing business model was the ad platform

one: price set at zero with revenue expected from advertising.

And yet at the same time, in the print world, The Times was building a

consumer expectation of premium pricing for a premium product and

was striving to secure as many long-term, loyal subscribers as it

could.

Seen in this light, the decision in 2011 to shift to a metered pay model

in digital looks less like a wild leap in the dark than the application

online and on mobile devices of what was already a proven model in

print. There were plenty of unknowns – some, by the way, are still

unknown today – but the new pay model was aimed at a group of

consumers, many of whom already had an expectation of paying,

because of the value they perceived in Times journalism.

Nor of course was The Times alone. The FT and the Economist had

been trailblazers of the metered model and the Wall Street Journal

had also already successfully launched a pay wall. But The New

York Times was by far the biggest general interest, as opposed to

finance and business, newspaper to ask for, and get, premium

subscriptions for its content. At the end of the second quarter, we

had around 700,000 digital-only subscribers in addition to our 1.2

million print subscribers, three-quarters of whom have registered to

use our digital services as well as the physical newspaper.

[16]

The emerging new model

So what next? Well, here’s one way of thinking of our task.

On the x-axis are all the people who touch The New York Times in

some way each month, some 43 million of them at the last count. I’ve

put a ‘T’ on the y-axis to mean time, but I mean that as a surrogate

for engagement or value delivered. Up there on the left at the top of

the curve are our most engaged readers – seven days a week home

delivery or all-digital-access subscriber – while at the other end are

the light users, people whose touch-point with us is maybe a handful,

perhaps even a single story in a given month on nytimes.com.

Now you can think of the area under this curve as the aggregate

delivered value of The Times, and it is the thing – in the end the only

thing – we have to monetise. And to state the obvious, the further up

the curve you go, the more likely it is that you can monetise to a

significant degree with a direct relationship with a paying reader. The

further down you go, the more likely that your main form of

monetisation will be indirect, through advertising.

Wherever you can, of course, you’d like both streams of revenue.

The success of cable and satellite TV in many markets is built on

access to these two revenue streams.

But the important thing is to focus on the entire area under the curve,

and not to get too hung up on that rather arid ideological debate

between pay and free, as if the only kind of pay which is possible is a

[17]

hard and impenetrable wall, and erecting it means a dramatic loss of

influence, and indeed of civic value.

Such walls exist – the Times paywall here in the UK is an example –

but they are not the only choice. The New York Times “wall” is

flexible and porous. We don’t meter referrals from social media or

email. But as we learn more about user behaviour, we will also

sometimes tighten the model. We recently limited the number of free

stories on our apps to three a day for instance, while for some of the

big stories – Hurricane Sandy, the election, Boston – we take it down

altogether in the public interest.

We don’t want to turn people needlessly away. We want everyone to

have the chance to sample Times journalism. But we also want as

many people to pay for it as possible.

Nobody ever suggested giving the physical New York Times away for

nothing. Nor the Guardian or Telegraph. Nor Le Monde or the

Frankfurter Allgemeine Zeitung. That’s because it’s intuitively

obvious that a quality physical newspaper costs a lot of money to

make.

So too, just as surely, does a quality news website – and for many of

the same reasons.

Since 2011, we’ve launched a successful suite of pay products for

our most committed readers – those with high demonstrated

willingness to pay. The first plank of our new strategy is to develop

[18]

additional pay offerings aimed at those who tell us they would

certainly pay us something for Times journalism but less than the

$200 or so which is our current lowest digital subscription – though

we also intend to create enhanced offerings for those who tell us they

would pay us even more than the current most expensive

subscription if we offered them the right additional features and

services. We want, if you can bear the jargon, to exploit more of the

demand curve.

But we want to do it not just with cut-down or pumped-up versions of

our current offering but with fresh expressions of our journalism that

our newsroom and the rest of the company can really believe in, with

their own integrity and appeal.

One of the new ideas is a project with the working title of Need 2

Know. Though it will be available on all digital platforms, we’re

developing it for mobile, and particularly smart-phone first, and it’s

intended to offer users the perfect briefing not just on the news that’s

already happened but on the events and stories up ahead that our

editors have already got their eye on, and to it with its own voice and

its own flavour. If you’ve caught the ‘New York Today’ feature in the

Metro section of our website, you’ll have an idea of what that flavour

could be.

We’re also at work on a set of other offerings, ranging from opinion,

one of the Times’s greatest strengths, to food and dining. And in all

cases, and despite any false rumours you may have heard to the

contrary, all editorial leadership rests – as it always should and will –

[19]

with Jill Abramson and the newsroom and with Andy Rosenthal and

his team in editorial.

The ability to exploit the same underlying intellectual property through

multiple formats and time-windows – from theatrical release, DVD,

pay TV, free TV, merchandizing and so on – is what made it possible

for Hollywood to keep movies profitable despite their colossal initial

cost and despite the fragmentation of entertainment first by TV and

subsequently by digital. News is too time-sensitive for many windows

through time, but the development of multiple different expressions of

our journalism, optimised for particular audiences and use-cases

aims to achieve a similar economic benefit.

And the opportunity to use an established and celebrated news brand

as the basis for new digital products, whether pay or free, is certainly

one possible reason why Jeff Bezos was attracted to the Washington

Post.

The international opportunity

We want to concentrate all of our efforts on leveraging the talent of

that newsroom and the reputational power of ‘The New York Times’

to build a successful and sustainable business based on a single core

brand and one integrated journalistic operation on all platforms and in

all territories.

[20]

That’s why we decided this year to sell the Boston Globe. The Globe

is a great newspaper which I am confident will thrive under John

Henry’s ownership. But, as I noted earlier, the business-model of

America’s metro papers is very different from that of The Times.

Over twenty years of ownership, the synergies between the two

operations were low. Most importantly of all, we want to concentrate

all of our efforts on The New York Times itself.

And that is why in just over a month’s time, we will rename the

International Herald Tribune the International New York Times. For

the first time, not just the physical newspapers but every version of

our website and of our apps will be under the same brand-name.

Our newsrooms around the world are already working far more

closely together than before and editorial control of the global edition

of the Web site will be handed over, for the first time, to Jill and

Andy’s teams in London, Paris and Hong Kong.

Thirty years after The Times’s move to become a national

newspaper, we want to explore what the international opportunity

could be for us in terms of new subscribers and new advertising

revenue from our English language physical and digital services, as

well as the possibilities of services in other languages. Can we both

extend the number of people who encounter Times journalism, but

also deepen their engagement and persuade more of them to

subscribe?

[21]

Without any marketing whatsoever, without the ability to address

people who hit the pay-gate in their own language or to bill them in

any currency other than the dollar, we gained around 70,000

subscribers from outside the US since the pay model began two and

half years ago. Now we want to see if we can attract more when we

do put all of those things in place.

We also want to explore what a fully joined-up advertising sales force

can achieve around the world with The New York Times brand and

the interesting and valuable readers we attract both in digital and in

print.

But our main ambition is to expand our base of paying digital

subscribers by reaching beyond the United States.

Again, it seems to me that the international name-recognition and

reputation of the Washington Post – unique among the metros – and

the potential that comes with it may be another reason why Jeff

Bezos bought it.

Other new revenue streams

We’re developing other new revenues streams as well.

I’ve mentioned video already. Short-form video is a creative

challenge for all news organisations on the web. News-users are

used to very rapid scanning of stories and even the broadcasters with

[22]

any amount of video to put out there have often discovered that text

and still images do the job best for many consumers.

Newsroom or studio-based video talk – which The Times has

experimented with over the years and which both the Wall Street

Journal and the Huffington Post are spending heavily on at the

moment – can work well when there’s a big and real-time event to

talk about. I thought that The Times’s video coverage of last

autumn’s election, combining news feeds of some of the key

moments with cogent analysis, worked very well – and it certainly

drove impressions. But, as the twenty-four hour TV news teams

discovered many years ago, there’s nothing quite as dull as

journalists talking to each other on video when nothing is happening.

But there are great journalistic and creative opportunities as well. In

the field, in Syria for example where Chris Chivers has done such

brilliant work, the video-journalist working for a newspaper can find

themselves on a surprisingly level playing field even when compared

with the most formidable broadcasters in the world.

I thought the use of video in Snow Fall, fully integrated into the story

and into the multimedia experience so that it never occurs to you not

to watch the testimony of the survivors or the animating graphics and

landscapes as your eye moves down the unfolding narrative – I

thought that showed a way forward in which one no longer thinks of

video as essentially a separate exercise, sitting alongside the core

text journalism as a complementary experience for those who have to

time to watch it, but as something central and unmissable.

[23]

So we’re developing a new programming strategy for our video,

stretching from hard news to opinion – the Op Docs, commissioned

and curated by Andy Rosenthal’s editorial team, are among the most

creatively interesting videos that the Times offers – to some of the

lifestyle areas, food, travel, fashion and so on, which are so strong at

the paper. The video must aspire to the same standard as the written

journalism and be just as Timesian in its quality and its

characterfulness. But what is not at issue is advertiser-interest. We

are currently leaving money on the table because we don’t yet have

enough video-advertising opportunities to sell.

Finally, we are developing some other businesses, each of which

seeks to key off a consumer expectation or brand attribute of The

New York Times:

o conferences, where we are bringing The Times and IHT

conference businesses together and significantly scaling them;

o smart games, building out from our crossword franchise and its

remarkable success as an independent digital subscription

play;

o and e-commerce.

Conclusion

[24]

In an interview with the Washington Post itself earlier this week, Jeff

Bezos talked about his new acquisition and his commitment to give

the paper the economic ‘runway’ it needed to develop a successful

new business model. But he also reflected on what he had learned

over the past couple of decades at his own business:

We’ve had three big ideas at Amazon that we’ve stuck with for 18

years, and they’re the reason we’re successful: put your customer

first. Invent. And be patient. […] If you replace ‘customer’ with

‘reader’, that approach, that point of view, can be successful at the

Post too.

Much of what I’ve said tonight is about building a model first and

foremost around the reader and about the need, if we want to secure

the future of these great news operations, to invent. But Jeff’s third

point – be patient – is worth taking seriously too.

The internet is an intrinsically free medium and nobody will ever pay

for anything on it. Professional journalism is over. We’re being

forced to exchange analogue dollars for digital pennies.

For the past ten years and more, newspapers have lived in the

shadow of these and other gloomy nostrums, all of them based on

the premise that digital is a one-off revolution whose consequences

are decided and easy to understand. None of that is true. Amazon is

one of the companies that first proved, not just that people will pay for

things on the Web but that they become habituated to it. The

success of the Times’s pay model, as well as that of others, suggests

that discerning readers will pay for high quality journalism, and at

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prices – the cheapest Times digital subscription is $200 a year, the

most expensive $350 – which are not one or five or ten cents, but

more like 20 to 40 cents in the dollar compared to print subscriptions.

We believe that the engagement of the readers of The New York

Times can be turned into growing revenues and profits. We don’t

believe that digital is a done deal: we expect to run a hybrid business

for many years to come, print and digital, not to mention subscription

and vital ad revenues as far out as anyone can see. Nor do we

believe that the landscape around us will remain static: we expect to

have to invent and pivot constantly to meet fresh changes in

technology and the market, but the whole time we will be looking for

opportunities – new offerings, new partnerships, new sources of

revenues – as well as threats.

One thing won’t change. The fact that it’s possible to have this

conversation about The New York Times is because of the steadfast

commitment of the company and its owners to support a particular

vision of outstanding journalism. That is the bedrock on which

everything else is built and, however else we change the business of

The Times, I believe that that commitment will never falter. Thank

you.