Today’s news that The (failing?) New York Times reported net income of $55.2 million, after losses a year earlier — and that its digital business raked in $709 million — is just one indicator that some of the nation’s oldest media properties are finally crossing the bridge into the 21st century.
The Times managed to turn a profit while employing 1,600 journalists — an all-time high. Fourth-quarter digital advertising revenue increased 22.8 percent, while print advertising revenue decreased 10.2 percent. Digital advertising revenue was $103.4 million, or 53.9 percent of total advertising revenues, compared with $84.2 million, or 46.1 percent, in the fourth quarter of 2017, according to the company.
Those numbers, added to a newly robust Washington Post, a consistently profitable New Yorker and the erection of paywalls at sites across the vast reaches of the internet, point to a very simple lesson learned — people will pay for quality reporting, videos, personal writing and exclusive information.
Given the excitement around subscriptions, it may seem surprising that TechCrunch isn’t doing something in this area… yet.
Some of this is driven by a newly relevant news cycle that has seen American audiences wake up to the day-to-day decisions that are reshaping the country from the halls of power in Congress and the White House.
“Our appeal to subscribers — and to the world’s leading advertisers — depends more than anything on the quality of our journalism,” said the Times’ chief executive, Mark Thompson, in a statement. “That is why we have increased, rather than cut back, our investment in our newsroom and opinion departments. We want to accelerate our digital growth further, so in 2019, we will direct fresh investment into journalism, product and marketing.”
For some in the word-salad business, the news comes a bit too late. Compare the fortunes of these hundred-year-old companies with the newer darlings of the media world and it becomes even more starkly clear how ad-driven businesses were eviscerated by social media.
Layoffs at BuzzFeed, Vice Media and our own parent company Verizon Media Group especially point to the failings of the “new” media model. The Times actually covered this at some length, but it’s worth repeating.
At two other new media properties, Vox Media Group (a division of Comcast NBC Universal) and Axios, a new subscription newsletter business, it’s a combination.
Owning an audience through exclusive information or distribution is a much better way to get to profitability than giving away the store to get eyeballs.
Even network television and movie studios are coming around to the subscription model as the salvation of their business. Ad revenues are declining and subscription services like Netflix and Spotify have already taken huge bites out of the cash cows of the broader entertainment industry. What do studios and networks have left but subscription, subscription, subscription? It’s why CBS launched its exclusive service, why Disney is launching theirs and how Amazon, Netflix and (even) Hulu have managed to become ascendant.
With a subscriber base, it’s easier for media businesses to sell sponsorships to particular companies or brands that want the influence. With subscriptions, a core readership gets to support the investigative work of a group of journalists and support (and join) a community.
The eyeball business was a classic contrivance of first-generation internet businesses — and it largely didn’t work then either.
Now the question remains whether this resurgence can also revivify the moribund prospects of local media. The Times and its marquee media brethren have a national scope and an amazing reach — or command a monopoly in large cities. What’s needed is the resurrection of a vibrant local news scene that can actually make money. Let’s see if the Times’ model shows the way… again.