Five years ago, in an excoriating and self-flagellating internal report, The New York Times gazed hard at its navel – didn’t like what it saw.
“We are not moving with enough urgency,” said The New York Times’ leaked Innovation Report. “Our journalism advantage is shrinking as more of these upstarts expand their newsrooms. Many (of our news) desks lack editors who even know how to evaluate digital work.”
Fast-forward to 2019 and “The Gray Lady” seems to be pointing in the right direction – at least, if latest financial results are anything to go by.
For its full-year 2018, the publisher announced it made $709 million in revenue from digital sources, fuelled by 3.4 million out of a total 4.3 million subscriptions being digital. That helped push subscription revenue up 5% and advertising revenue up 11% on a like-by-like basis.
Subscription revenue at the publisher, more than $1 billion, is now almost double advertising revenue. But, to Lisa Howard, SVP and GM of media at The Times, those two very different revenue streams are interrelated and co-dependent.
“Your subscription business plays into your advertising business,” Howard tells Beet.TV in this video interview. “If we’re making something that’s worth consumers paying for, it’s worth their money and it’s worth their time, then that’s a valuable product.
The Times’ revenue growth means that it is approaching its target of $800 million in digital revenue by 2020, so it is setting a new goal – 10 million subscribers by 2025.
And Howard wants more of everything.
“Paying visitors means a higher quality, more engaged environment,” she says. “Advertising won’t be much of a business in the future in the digital space, unless we have real engagement from our readers and for our advertisers.”
Can both models happily co-exist? That is a key question for many kinds of media business in 2019.
As economic waters have ebbed and flowed, both advertiser and reader revenue have each grown in emphasis. Newspapers have had dual revenue streamed for hundreds of years. Now operators like Netflix are showing that, in entertainment at least, subscriptions can sustain a business without advertising.
When it comes to news and current affairs, the jury is somewhat more out. But Howard hopes that advertisers stay in the news game.
“I think advertisers understand that consumers want the truth,” she says. “That they want to read and engage with compelling, trusted news sources.”