The (Not Failing) Media Company
While most people are paying attention to video, podcasts, and newsletters, this is a fantastic analysis on why The New York Times is a more exciting business than Spotify, Netflix, Substack, etc. You should flip through to learn how the NYT has invested in technology, built multiple subscription businesses, and is exceeding their growth targets.
Some of the highlights:
- In 2014, The New York Times wrote a memo titled “The Innovation Report” which laid out the failings of their digital strategy and what they needed to do to move forward
- Here are the four key things they did to reinvent their business:
- Cleaned up the balance sheet: Sold off all non-core assets like local newspapers, TV stations, and its headquarters building
- Invested in content: NYT pays reporters 2.5x industry average, and sites like BuzzFeed have become “farm teams” for the NYT
- Invested in tech: Made tech hires from FB, Google, Spotify, etc. Added new board members. Invested in data, website, and app
- Launched new revenue streams: The Daily is the most popular podcast in the world. NYT Cooking and Crossword have 1.3M subscribers
- Result: Now, The NYT has 4x more subscribers than they did at their print-era peak. Revenue is flat, but this reflects a shift from 2/3 ads + 1/3 subs -> 2/3 subs + 1/3 ads
- Going forward, their business model is stronger than ever because (1) they have better unit economics than in a print world, (2) they spend less on content than companies like Spotify and Netflix, and (3) they have less competition than other media companies
Very exciting to read about a successful corporate / digital transformation!