December 1, 2020

A Tale of Two Papers

Sara Fischer at Axios had a good story on the subscription numbers at The New York Times and The Washington Post over the duration of the Trump presidency.

Between the two papers, there has been considerable growth in subscribers. For The Post, the number has increased by more than 3x since 2016. The New York Times, with a larger overall digital subscriber number, has increased by close to 3x.

But their strategies have been very different, even if some might not like to admit that fact.

For The Times, as Fischer reports:

The Times has been vocal about its strategy to build brand awareness to drive subscriptions, which includes everything from launching TV shows to hiring big-name journalists with loyal audiences and building products around them.

It’s also focused on creating editorial products that it hopes will help make it a daily habit for readers, like its cooking and crossword apps.

This is very much inline with the strategy we’ve seen play out at The Times. It has been hoovering up star talent, giving them cushy jobs like being a columnist and then raking in the subscription revenue from it.

That’s different from how The Post has been growing. Sources tell Fischer that the focus isn’t hiring major personalities to grow, but rather, to build out specific coverage pods that readers have interest in.

Both strategy have their merits. The easier strategy and where I think more immediate success will come is tied to The Times’ approach.

As I’ve said a number of times now, people are more likely to pay for content that gives them a validating feeling. And while I believe The Times’ newsroom is perfectly unbiased, we have to pay attention to where most of these hires are taking place: the opinion section.

This is critical because people will ultimately gravitate—and pay—for content that they resonate with. In the case of the opinion section of The New York Times, that means content that fits a more specific type of reader.

However, that does not mean, for a second, that The Post is going to struggle. According to Fischer:

When it comes to subscription content services broadly, research shows that shiny objects (original content, hot talent, discounts, etc.) tend to get people to sign-up, and that functionality and lots of content options keeps them from leaving.

Sources wonder if the company’s long-term focus on behind-the-scenes tech, and on journalism over journalists, will hamper its ability to compete with The Times for the buzz that drives new subscriptions.

The sources are wrong.

In a recent episode of the podcast, Bloomberg’s Julia Beizer said something interesting:

What I love about active subscribers is it says people on any given day who are subscribed to your publication. That’s new users you acquire day one and users who have not yet churned. Why do I love that metric? Because it’s inclusive of both acquisition and retention. You can add a bunch of users, but if they all churn out after a one month free trial or low paying trial, you are not actually growing your long-term revenue. What active subscribers allows us to do is look at those two levers in terms of acquisition and retention and try to figure out on a month-to-month or quarter-to-quarter basis where we should be putting the most of our efforts to make sure we’re driving the most sustainable business.

And this is why the sources are wrong. For the long-term viability of any business, it’s not about wild new subscription numbers. It’s about how long you are keeping your subscribers in your system. It’s about the maximum revenue generated on a single reader and increasing the LTV.

Unfortunately, most executives in media are dazzled by raw numbers rather than actually building profitable media businesses. That means, for the most part, we’re left with things like $1/month subscription products that make you look great while your ARPU suffers immensely.

The Post has been investing in its goal to keep subscribers around for the long-term. And that’s not to say The Times hasn’t. You can’t grow to over 6 million digital subscriptions with bad retention. But let’s call a spade a spade… Most media is not about flash. It’s about long-term, consistent substance where growth compounds over time.

According to the Axios story:

The Post now has an engineering team specifically focused on subscription conversions that rebuilt The Post’s paywall and metering applications this year to boost sign-ups. It also created a new post-purchase experience that has helped The Post dramatically reduce subscriber churn and increase app adoption.

The paywall tech is now licensed to other media companies through Arc.

That last sentence is interesting because it is indicative of where The Post might be headed with its long-term product strategy.

Digiday wrote a story about recent partnerships that The Post’s Arc publishing platform has been making and modifications to the software.

More recently, it has focused on partnerships and integrations with third-party vendors as it hunts for a wider variety of clients and as subscriptions and first-party user data grow into a bigger priority across the internet.

On Monday, the Post announced a number of updates to Arc, including integrations with BlueConic, a customer data platform that already works with publishers including Hearst and the Boston Globe, and Spreedly, a payments orchestration platform.

In addition to those integrations, Arc also announced it was adding subscription page templates to its page-builder templates, part of an ongoing attempt to make it easier for publishers to stand up subscription offerings quickly. The Post launched the first of those templates last July. Arc also added capabilities to make it easier for publishers to test individualized subscriber experiences across its sites and mobile apps.

There are two things worth calling out from that section.

First, the last paragraph. Because The Post runs both an O&O property and powers many major, local newspapers, it is in a position to learn what works and make new product changes. In part, that explains why The Post has invested so heavily in its technology business. Since it has a major software licensing division, it needs people to consistently update those products. That’s different than how The Times does things, which is reliant entirely on its editorial.

Second is the partnership with BlueConic. Customer data platforms are single systems that give you a snapshot of your owned users. When a user comes to the site for the first time, the CDP typically drops a cookie on them. Then, when that user registers, signs up for a newsletter or subscribes, all the activity that took place with that cookie is tied to the user’s email.

As more publishers rush to own their 1st party data, there has been an urgency to get CDPs figured out. The fact that The Post is starting to partner with other vendors—something it has not typically done—demonstrates just how important this technology is to publishers.

Long-term, I am very intrigued with one final part in that Axios story:

Sources tell Axios that eventually,The Post hopes to build out a single sign-on authentication feature across all of the sites that license Zeus, which could help it boost subscriptions, especially at the local level. Since February, more than 100 sites have signed with Zeus, including many local news outlets.

If The Post is going to power all of these sites and then be the monetization engine on top of that, they have a backdoor. What’s to say they couldn’t create a skinny bundle (a phrase that Scroll’s Tony Haile used) between The Post and respective local papers? I wrote about that idea over the summer and said:

But let’s say this works. And let’s say that last week’s news about The Matchup works. Suddenly, with a single local news subscription, a reader would get:

1. Local news from their local paper

2. Local sports from their local paper

3. National sports from every other local paper

4. National news from The Washington Post

That’s an incredibly powerful product. It also puts the local paper at the center of the equation. Rather than being an afterthought, the local paper is now what people are building a direct relationship with.

Ultimately, though, these are still business deals. The Washington Post would need to work on dozens of contracts with local papers. This takes work and media companies are not historically very collaborative. Perhaps in a world where The Times is the biggest competitor to everyone else might be the impetus to make change.

Something else happens in this situation. When all the local papers can rely on The Washington Post to do their national reporting, each local paper doesn’t need to have national news desks. Those journalists can be reallocated to local beats, which provides better coverage. Or, and no one likes to write this, it means that those national desks aren’t needed and teams can be leaner.

This is a hard business to get right and, like most of these deals, more of them will fail than succeed. But step one is sharing the same technology with your partners. It makes a lot of this much simpler.

It’s definitely a tale of two papers… The Times has focused heavily on its editorial product through bringing in major names. In many respects, these hires have gravitated toward opinions pieces, which suggests The Times is preparing to go deeper into serving a specific type of audience.

The Post, on the other hand, has focused more of its efforts on the underlying systems. In many respects, it’s as much a technology company as a media company. That has allowed it to do a better job on its owned properties, but also for its partners. That doesn’t mean it hasn’t invested in editorial, but the approach hasn’t been with star power.

Which is the better approach? If you had to choose, how would you build?

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