The Times' newest product: confidence
"You can tell how excited we are by this new product," Arthur Sulzberger Jr. was telling a few dozen guests who'd gathered for cocktails on the 15th floor of The New York Times Building early last Thursday evening.
The Times publisher and chairman was talking about NYT Now, the paper of record's just-launched mobile app designed to lure new digital subscribers at a bargain price.
The reception was nice, but not too nice, like a party that's held in the den instead of your host's fancy living room. Servers circulated the space with bites of tuna tartare, beef crostini and mushroom balls. There was Heineken, Amstel Light, wine and cosmopolitans to wash down the snacks.
The whole gang was there: Executive editor Jill Abramson; C.E.O. Mark Thompson; advertising chief Meredith Kopit Levien; E.V.P. of digital products Denise Warren; digital product manager David Perpich; and various other Times executives and journalists. They mingled cheerfully with a coterie of media reporters—"the people we're buying drinks for," as Sulzberger described the bunch during his brief, unmiked speech, delivered from a cocktail table in the middle of the room.
Thompson took the floor next.
"I'm pretty new here, a year and a bit, and it's certainly been clear to me that this company, and this newsroom, was only ever going to be able to do new things that they really believed in," he said.
Then Abramson chimed in: "I believe that a lot of the people who are gonna subscribe to NYT Now are gonna become hopelessly addicted ... and that they will want the full buffet table" of Times content.
There's something in the air over at 620 Eighth Avenue, and you can feel it in the palpable confidence over NYT Now and several other products the Times is rolling out in a bid to scale its audience of paying digital readers.
Sure, advertising's been in freefall for 13 quarters straight and the Times is jousting with an expanding complement of ambitious and well-funded competitors. But this doesn't seem like the dour Times of the late aughts and early 2010s—a Times that had to toss a couple hundred journalists overboard to prevent the ship from sinking; that watched rival outlets, unburdened by the costs of a 163-year-old daily newspaper, poach some of its biggest bylines with rock-star salaries and new audience platforms; that had almost begun to feel like a Times that maybe, just maybe, wouldn't even exist in its truest and purest form in another five or 10 or 15 years (depending on how cynical you are).
To hear some insiders tell it, the Times of April 2014 feels like a place with a plan; a place where people are starting to get stuff done that might actually turn the tide of financial misfortune.
A niche subscription strategy aimed at mobile content consumption is at the heart of this momentum, which is in part a response to the slowing rate of signups to the Times' core all-access digital packages ranging from $15 to $35 a month.
Significant editorial resources have been devoted to the initiative, which has required a fair amount of cross-pollination among departments, the kind of teamwork the Times has been touting forever but which was introduced at Thursday's cocktails as a new development, perhaps because these partnerships among business, digital and the journalists of the Times are actually starting to gel.
"The way the team worked on this is a new way of working on things at the Times," Abramson said. "I think it's a great template."
Private conversations with Times journalists suggest there's no shortage of enthusiasm in the newsroom for a project that was plainly born on the business side.
But there are tests ahead for this new enthusiasm. The first is whether they can persuade enough people to open their wallets not only to justify the investments in these new products, but to have a meaningful impact on the balance sheet of a news organization that is relying on ever less-traditional revenue streams to stay afloat.
How many people? We're talking hundreds of thousands of necessary new converts, potentially, over the next couple of years. Ken Doctor, a media analyst with Outsell who follows the Times closely, told Capital that NYT Now alone should be aiming for 200,000 signups over the next 24 months.
At $8 a month, the app offers a carefully curated feed of select Times content plucked by a team of more than a dozen journalists, as well as a Tumblr-esque stream of picks linking to content from other news outlets. It's overseen by the Pulitzer-winning investigative reporter Cliff Levy.
Also launched last week, at the higher end of the pricing spectrum, is Times Premier, which gives the paper's most hardcore readers exclusive access to bonus content like e-books, videos, crosswords and behind-the-scenes features at a cost of $45 per month.
Two additional products, a cooking app and an opinion app, are in the works under the leadership of former restaurant critic Sam Sifton and opinion editor Andy Rosenthal, respectively. They're scheduled to launch in the coming months, but the pricing structure and full details have not been revealed publicly.
The goal here is to further build up circulation revenues, which have surpassed advertising revenues at the Times thanks to the early success of its paid metered model for unlimited digital access. More than 760,000 subscribers have started paying to read Times content on their web browsers and mobile devices since the model was introduced in March 2011, and this segment accounted for nearly $150 million in revenues in 2013, up 33.5 percent from 2012. Total revenues were down a little more than 1 percent in 2013 to roughly $1.58 billion.
The tricky part is to scale these new options without cannibalizing the existing pool of digital subscribers.
In an interview with Capital last week, Warren, the digital chief, said the Times commissioned a study some 18 months ago to figure out which types of products would best rise to the challenge. NYT Now, Times Premier and the cooking and opinion apps were the fruits of that exercise.
"There are a lot of things that different segments of the audience are interested in," she said. "At some point, you just have to say, 'We're picking this and we're gonna try it.'"
The four initial products will serve as a crucible for further innovation in this area. Warren wouldn't say whether there are any other such products actively in development, but she said that "when you think about the depth and breadth of The New York Times, you can let your imagination run wild."
Warren declined to share how many people had subscribed to NYT Now or Times Premier out of the gate. But she said, "We're very pleased with what we're seeing." She also declined to specify the Times' subscriber goal for any of the apps in their first year.
Doctor said $35 million to $60 million in additional subscriber revenue within 12 months of the roll-out of all four products would be a reasonable goal. In terms of upgrades, Premier would be in decent shape if it converted at least 5 percent of the Times' existing 760,000 all-access digital subscribers, he said, telling Capital via email: "Premier will work, at very low cost. If one of the other three is a significant hit, that will greatly help the plateauing of All-Access revenue."
Digital-subscriptions will be one of "the main drivers of both revenue and profit" at the Times, said Doctor. The Times also is pursuing video enhancements, global expansion, a native advertising strategy and a growing events business.
Other niche subscription areas the Times might do well to dabble in? Travel, pets and movies, according to Doctor, who also thinks low-price Times products would be popular in Brazil, China, India and the Middle East.
"I do think there are flavors of these things that can be more targeted to other markets," she said. "It's absolutely something we're talking about."