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 howto manual I’ve been looking for. Then I got to page 17. The New
[1]
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 nontransferability 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
[2]
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
[3]
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,
[4]
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 publiclyspirited 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 factchecking 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
[5]
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.
[6]
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
[7]
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 inflectionpoint 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.
[8]
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
[9]
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
[10]
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, pricingpower 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
[11]
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 largescale 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
[12]
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.
[13]
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
[14]
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.
[15]
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
[16]
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
[17]
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 –
[18]
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.
[19]
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?
[20]
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
[21]
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.
[22]
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
[23]
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.
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