June 25, 2023

Today's Topics

Hello and welcome to the Chartr Sunday edition! Today we're tackling a topic close to our own hearts, the business of news. We dive into how the NYTimes has survived, and even thrived, in the last 15 years — a period of incomparable change in the industry that's seen century-old brands falter, bright upstarts crash and burn, and the monolith of big tech eat everyone's lunch.

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The decline of print: read all about it

Can you remember the last time you strolled up to a newsstand and picked up your daily? It's probably been a while — or perhaps more likely... you’ve never done that in your entire life.

In the last 3 decades, the information diet of a typical citizen has changed dramatically. Physical newspaper circulation, both on weekdays and Sundays, has collapsed since the mid-1990s, as the friction of distributing information plummeted to nearly zero with the internet.

In its heyday, weekday editions would routinely reach more than 60 million readers, before beginning a slippery slope of decline in the early 1990s.

Interestingly, the Sunday papers — perhaps because they were filled with fewer "breaking stories", as this very Sunday edition itself is — staved off their eventual demise a little longer. Data compiled by Pew Research Center shows Sunday newspaper circulation holding on until almost the turn of the millennium, before plummeting in the early 2000s.

With declining circulation, job cuts were inevitable. In the last 20 years, thousands of journalists, editors and those involved in the physical production of millions of newspapers were laid off. America's newspaper industry shrunk from over 400,000 employed at the turn of the century to less than 90,000 as of April this year, as reported by the Bureau of Labor Statistics. Scores of newspapers have shut down, and the shrinkage is ongoing, with 360 local newspapers shutting down during the pandemic alone.

Even more nimble, digitally-native brands have struggled. Each burning brightly for a time, media companies like BuzzFeed, Vice, and Vox carved out a niche on the internet before the harsh reality caught up with them, with all 3 either closing divisions, laying off staff or going bankrupt entirely (Vice) this year.

But amidst this challenging landscape, the 170-year-old New York Times has survived, and even strangely thrived, retaining the title of largest daily print circulation, as reported by the Alliance for Audited Media.

The Gray Lady Goes Online

Despite the shifting tides, The Gray Lady, as the paper was often called, continues to hold a prominent place in America's news landscape.

The publisher first started a website in 1996, but it arguably wasn't until 2011 that its major transformation got underway, with the introduction of a device we all increasingly run into: a paywall. Initially that paywall allowed readers a generous 20 articles per month for free before requiring a subscription.

In its first year, the paper managed to secure 400,000 paying digital subscribers, a promising start. But, it took the company four more years to reach 900,000 subscribers. Even more concerning, the new paywall led readers to seek news elsewhere, resulting in a drastic drop in website traffic, going from 160 million monthly visitors in mid-2011 to 80 million in 2013.

From then on, the New York Times made pivotal changes to bolster its online presence and accelerate its digital footprint and revenue. The company leaned into digitally-native advertising, revamped its app, acquired the consumer site Wirecutter, launched a dedicated cooking app, experimented with digital-only projects like the online crossword and repositioned the company as an online-first publication with a newspaper, rather than a newspaper with a website.

Slowly but surely, it worked.

Last year, 42% of the company's $2.3 billion revenue came from readers who exclusively paid for online NYT content, with the added benefit of shifting the focus from advertising to subscription-based revenue — which is more predictable. Indeed, ad revenue has steadily declined at the NYT, now accounting for only 23% of the business, down from 50% in 2010.

Pay for news?

The NYT's ability to convince people to actually cough up for its content is unique — finding an audience for its left-leaning coverage in an era of heightened political polarization. As of the latest count the company boasts 9 million digital paying subscribers, more than any other English-focused news publisher. The Athletic, which the NYT acquired for $550m in 2022, would stand alone in third place on the top 10 list were it still a separate entity.

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Paywall pirates

As modern media entities embrace subscription models, they hold hope, in a world where an abundance of web content is available for free, that they can once again convince individuals to pay for news. The strategy of the New York Times has been to go for scale, branching out into cooking, sports journalism and even games — acquiring viral hits like Wordle to accompany the core journalism. But habits are hard to form, and break, and paying for news (particularly digital-only news) remains an alien concept in many countries.

According to the Digital News Report by Reuters Institute, 21% of people surveyed in the US said they had paid for news online in the past year, fewer than in Norway and Sweden. However, the New York Times can find solace in not being the "London Times" — only 9% of surveyed individuals in the UK reported paying for news in the previous year, likely because of the prominent public service media entity the BBC.

A trusted voice

One area where the United States distinguishes itself is in the willingness to pay for independent journalism from individuals — 8% of respondents reported paying for a newsletter (we promise to remain free) and 5% pay for content from a podcaster or YouTuber. If the 2010s were the era of scale, when smaller news organizations were squeezed out by the bigger players during the industry decline, the 2020s could be the era of the individual, as platforms like Substack and Medium build platforms for writers looking to strike out on their own.

Into the unknown

Of course, just as major news organizations got a handle on how to distribute on the internet, AI has emerged. Tools like ChatGPT could level the playing field, allowing smaller teams to do more with less, but their usage also threatens a potential "race to the bottom". One news outlet could report a story, and suddenly hundreds of sites regurgitate the information in a slightly different way with AI — amplifying any potential mistakes in the original reporting.

Thanks for reading, we hope you enjoyed our exploration of the world of online news — enjoy the rest of your Sunday!

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