The New York Times Strategy Highlights: Competition with New Media and Business Expansion
"Vedomosti" published a story about the plans of the general director of The New York Times Mark Thompson for business development. We selected the key points of the article that will help to understand the publication’s strategy.
Niche products for smartphones
The new CEO has spent a lot of effort promoting the publication using smartphone apps. Thompson launched a series of niche products, each of which was supposed to not only make a profit, but also help digital subscription sales to The New York Times. Not all projects survived, but some remained on the market.
The NYT VR app was launched in November 2015. We are talking about “immersion journalism,” when the viewer with the help of three-dimensional glasses is in the center of events. He can look back, sometimes even choose the point from which he looks at what is happening.
In March 2016, Thompson said that the number of downloads of the NYT VR app, of which he had doubts about success, had crossed the 0.5 million mark.
The most successful online product of the publication was the NYT Cooking application.
The application was launched in September 2014 and is available only for the iPhone. A year later, Thompson told Advertising Age magazine that he has more than 8 million unique visitors per month and their number is constantly growing.
In July of this year, it was announced that NYT Cooking was launching a self-service food delivery service. They are already packaged in the right quantity, so it is enough, checking the recipe, mix them and put on the stove.
The New York Times is also involved in other related businesses. She sells wine, accessories with her logo, organizes conferences and even tours. In 2015, the publishing house earned $ 95 million on a non-core business. But the main thing for Thompson is primarily subscription and online advertising revenue.
The number of subscribers to the digital version of the publication is constantly growing - only in the II quarter of 2016 their number increased by 51,000.
In 2015, the online subscription brought The New York Times $ 193 million - 14% more than in 2014, Adweek magazine writes. .
“We think it’s very useful to think of ourselves primarily as a business with a subscription model,” says Thompson.
The newspaper introduced paid access to articles in 2010 and by the end of 2011 managed to recruit more than 320,000 subscribers willing to pay for its content, writes The Huffington Post. By the time Thompson came to the post of chief editor, there were about 0.5 million of them, in 2015 the line of 1 million online subscribers was crossed, and in the second quarter of this year there were already 1.4 million, writes FT, adding that the promise Thompson to bring the paid user base to 1.5 million people by the end of the year looks more realistic.
Competition with new media: content and promotion
In 2014, after a six-month study, The New York Times released an Innovation Report on the future publication for internal use .
The term disruption appears in the report.
New media are building up their audience by offering cheap and low-quality materials, quickly publishing them after the event.
They are also actively experimenting with new formats and technologies. The culprits of the “gap” in the report are BuzzFeed, Circa, ESPN, First Look Media, Flipboard, Vox and Yahoo News.
The New York Times can compete with them by attracting readers with other types of materials:
Forever relevant and repackaging
Since its founding in 1851, almost 15 million materials have been published in the newspaper, some of which have acquired the value of classical literature. But even non-top materials can be sold again if the articles are correctly packaged. For example, a selection of past issues on Valentine's Day was well read.
Short News Reviews
“Since last year, we have been developing things like the morning information note. This is not a glimpse of the two or three headlines of the editorials of the printed number, but a compilation created to briefly inform you about what happened the night before and the news agenda for the coming day. In New York, for example, this is news about the operation of the transport system, weather and content for readers with different needs and in different moods. ”
The New York Times publishes about 230 different materials on weekdays and about 330 on Sunday. We are only talking about materials coming from the pen of 1300 journalists of the publication. Reprints of news agency messages are not included in these statistics, and there may be several hundred each day.
At the same time, Thompson is trying to keep the paper circulation of the newspaper, writes FT. He is confident that The New York Times will release another “10 years or more.”
Native advertising has become the fastest growing part of The New York Times advertising business, Thompson told Business Insider: “Already in its first year in 2014, revenue was $ 13 million. In 2015, it was more than $ 35 million. In 2016, I expect $ 50 - $ 60 million. "
In 2014, one of Thompson's favorite divisions was opened - London's T Brand Studio. She creates videos, photo galleries, articles and other types of native advertising. That is, advertising is not in the form of a picture with a slogan, but journalistic material.
Buying Marketing Agencies
In March this year, NYT acquired the marketing agency HelloSociety, which works with social media stars. Thompson relies on synergy, quoted his magazine Advertising Age: “This social network has a lot of very loyal customers who are not clients of The New York Times, but we will be glad if they become one. And we have customers that we can bring to HelloSociety. ”
Thompson is interested in companies that carry a set of marketing services that can be offered to customers of The New York Times.
In September of this year, Thompson made another deal: The New York Times bought the design studio Fake Love, specializing in virtual (just for NYT VR) and augmented (AR, it uses, for example, the game Pokemon Go) reality.
Online Advertising and Adblock
In the second quarter of this year, The New York Times advertising revenue fell 12%. Print ads brought in 14.1% less, and digital ads - 6.8% less. In the III quarter, the publication expects a further drop in advertising revenue.
At the same time, online advertising is the most important source of revenue for the digital version of the New York Times. According to Thompson, the newspaper reads online about 110 million people, of which more than 1.5 million do not have a subscription.
In 2014, The New York Times received $ 400 million from online activities and Thompson decided to double that figure to $ 800 million by 2020.
In March 2016, The New York Times also joined the battle with ad blockers. Subscribers began to show a pop-up window asking them to disable the lock.
For those who do not have a subscription, they tested two approaches. A notification that can be removed with a mouse click and a warning that disappears only after disabling the ad blocker or subscribing.
More than 40% of non-subscribers who received the last type of warning have whitelisted NYT, i.e. ad blocking is disabled when they enter the site, and users see it. At least 30% of subscribers did the same, receiving a retractable warning.
Strategy for the coming years - new products and new markets
The bet is made in two directions. The first is to increase revenue from an American audience with new products like NYT Cooking.
The second is access to a new audience. The company is investing $ 50 million in international expansion, hoping to get readers in Latin America, Australia and Canada. Thompson believes that millions of potential subscribers are waiting for him there.