Story written by Ken Doctor at Politico
Toughening the Facebook wall helped. Could a Lewandowski Leap now build on the Trump Bump?
It’s the 10,000-subscriber-a-day march.
As the full meaning of a Donald Trump presidency preoccupies American minds, The New York Times has seen a more-than-tenfold increase in daily subscription sign-ups, far surpassing any other news medium.
In fact, on a number of individual days since the election, more than 10,000 new subscribers have offered up their credit cards – which would be almost 20 times the rate of subscription sign-ups just a year ago.
As New York Times CEO Mark Thompson takes center stage this afternoon at New York City’s annual UBS Global Media and Communications Conference, he’ll offer up the latest numbers, which could come in at about 170,000 or more – just since election day.
Thompson will speak on the first of three days of events that include keynotes by News Corp’s James Murdoch and Netflix’s Ted Sarandos, as well as dueling ones on Wednesday morning, as would-be new media titans Verizon CEO Lowell McAdam and AT&T’s Randall Stephenson face off.
Observers wouldn’t normally be expecting much news in Thompson’s continuing story of the Times’ digital transformation; at most, they’d expect to hear about work very much still in progress. Now, though, their antennae will up, as the Times’ Trump Bump has become its own stunning unintended consequence of an election that still has the country, and its media, reeling.
That big bump means that in the stretch of less than four weeks the Times has added 10% to its paid (digital and/or print) subscriber list. (That’s a net number, after accounting for any cancellations; those surged some around the election as well, but have now subsided.) These numbers provoke three big points:
- Subscribers will now drive the Times to a new apex of reader revenue, approaching 60% of all its income. The Times, like all its peers, used to look at “circulation” revenue as but as a means to lucrative ad revenue. Ad revenue – now near totally disrupted by digital marketing and Google and Facebook, in their duopolistic domination– used to drive 75% of the business. Now at the Times, it is down to 37%. Consequently, as print advertising continues its steep decline, the Times is less affected by that drop than other publishers still more dependent on advertising, as compared to reader, revenue.
- New subscribers should add at least $30 million a year to the company’s coffers, as long as the Times can hold onto them. As almost major print-based news companies continue to buy out and lay off journalists to make budgets, the Times’ own 2017 budgeting just got unexpected help.
- There are cofactors to the Trump Bump. While the mogul’s win has driven this unprecedented increase, there’s more under the hood of these numbers than meets the eye. One curious one: The Times has doubly toughened its stance towards Facebook – which we’ll look at more closely below.
Add it all up, and Times, ironically, becomes the first major beneficiary of the Trump times. The Times – struggling for almost a decade to regain its business footing given both the print-to-digital transformation and the Great Recession – may finally be on the brink of a sustainable future.
It can count more than 2.5 million paying subscribers, including the 1.1 million who still take the Sunday print paper. (Its daily print circulation stands at about 600,000, shrinking at about an annual six to seven percent clip.)
It is those readers who are proving out a new business model for national news, though only at a few select, high-quality news providers. In fact, it should be noted that a surprising number of recent new subscribers have come directly to the Times – without responding to a marketing offer or a paywall – by typing some variation of “subscribe” and “New York Times” into their browsers.
Nor is Donald Trump alone responsible for turning what had been a 600 per day subscription rate into one topping 10,000.
Clearly, we can attribute many of those post-election day customers to Trump’s victory. Many of those subscribers (how many in Pennsylvania, Michigan and Wisconsin, we can wonder) now see new value in the Times. Its campaign reporting, along with that of the Washington Post, distinguished itself.
As its staff produced voluminous questioning content on everything from Trump’s taxes to the multitude of sexual harassment claims, the Times proved its mettle. But how will this storyline play out in the months and years ahead?
The ‘Lewandowski Leap’?
Even as Trump the Candidate used the Times as a foil, the duo of the Times and Trump have now been coupled, oddly, in history. The President-elect plays nice for a couple of hours at the Times building, then re-emerges soon after to bash the media, a pattern we are soon to see repeated often through the next 1500 days.
In fact, we have no idea what’s to come in this relationship.
As recently as Friday, one-time Trump aide and fleeting CNN election commentator Corey Lewandowski – either in apparent application to become the President-elect’s new press secretary or heedless of that process – called for jailing Times’ executive editor Dean Baquet.
The impetus? Baquet had said that he would “be would be willing to risk jail time to publish Trump’s tax returns” in September, likely never dreaming that the emerging “lock’em-up” chants of the fall could be soon backed with state power.
Could there soon be a (Lock’-Em-Up) Lewandowski Leap for Times subscriptions, building on the Trump Bump? Is having a specific target on its back a key to continual surges of subscriptions? Or will the growth rate come back to earth?
Lessons from Brexit
Even more importantly, can the Times hold on to this new group of paying readers?
The Financial Times’ recent performance, driven by its own Trump-like Brexit experience, may be instructive. The FT – seen as an honest broker in describing the potential impacts of Brexit – saw a more than five-fold initial bump in subscriptions. Then, buying activity about doubled in the period after the election. (The FT also saw its own Trump Bump, though a lesser one than it saw in Brexit.)
“In previous news spikes, [including Grexit a year earlier], subscribers came in and then left in similar proportions, but with Brexit, we’ve retained a highly significant proportion of those that came in on the new spike,” Jon Slade, the FT’s chief commercial officer, told me this weekend.
Slade explains that the FT’s handling of the new customers has made a difference. There are several reasons for the performance, he says.
“We put all newcomers in a specific segment for customer relationship management activity. Two, the story is ongoing of course. Three, many of those that came in took annual subs, not monthly or trials: we optimised our acquisition activity/offers for both long-term value and volume to make the most of the incremental traffic.”
That under-the-hood activity is one we see much in play at the Times as well.
Playing Facebook differently
At the UBS conference today, Thompson is likely to remind analysts that the Times’ Trump Bump is built on much more than political bombast, and its journalistic reaction to it.
The Times – learning from five years of paywall experience – has been able to make the most of this unanticipated public reaction. Even before the election, in the third quarter, it had doubled its subscription growth rate.
The Times believes that before Election Day it could give credit to Trump for something less than half of the increases it was already seeing. Therein lies that deeper story about the evolution of news-driven reader revenue, and that’s one with wider implications than the Trump Bump.
One significant key: the Times has significantly closed off its free-sample Facebook “side-door.” Late last year, the Times began more strictly applying its 10-articles-for-free paywall to Facebook and most other third-party sites, not including Google and other search referrals. The Times wants more regular social readers to pay up.
Up until the end of 2015, Facebook readers could get around the paywall by clicking through from links. Now, if they try to read an eleventh article, they hit the paywall, and the Times has also gotten better at converting these paywall-bouncers into subscribers, in the emerging art of news subscribers “propensity modeling,” iterated by the FT.
In fact, the Times has made a number of unsexy, incremental improvements to its sign-up-for-subscription processes and tested new marketing programs, including increased fifty-percent-off offers and “trial” deals, as well. In total, these moves have helped drive up its numbers.
And so the Times – given its learning and its conversion technology – was better positioned to benefit from the Trump Bump than it might have been a year ago. (Few other national news providers have talked about a Trump Bump. The Washington Post is up 73% from the first half of the year, and the Boston Globe told me this week of an immediate tripling its digital subscription post election.)
What else has helped drive the pay totals?
All of these news publications could draw on a much larger 2016 pool of would-be subscribers, as digital audience numbers soared. Both the Times and the Post saw 100 million U.S. unique visitors, for the first time, this fall.
Finally, for the Times, three free “no paywall” days the Times made available around election day itself widely showcased its coverage.
In this changing environment, it’s worth recognizing that the Times’ change in relationship with Facebook goes deeper.
The Times has cut back on its use of Facebook’s much-ballyhooed Instant Articles – in distinct contrast to its peer and emerging competitor, the Washington Post, which has published most of its content through the program. The Times puts up a few articles there daily, and selectively, “largely retreating” from Instant Articles.
As three weeks remain until Christmas – and six weeks until the Inauguration – we’re curious about how the gift season may affect the Times’ new subscription sales through year’s end.
Consider the Times’ immediate triumph – a more than 10% increase in overall paid readers in just three weeks – an exercise in fear and hope. Just as Trump-stunned millions set records in supporting progressive non-profits, new subscribers attempt to play defense against the President-elect.
And, they hope, the Times can counter a direct-to-the-nation media operation that will be run out of the West Wing, architected in part by alt-right Breitbart publisher Steve Bannon.
Progressive groups – from the global winter-opposing National Resources Defense Council to the alt-right-identifying Southern Poverty Law Center to the rights-defending ACLU – have upped their appeals. On this week’s Giving Tuesday, the ACLU reported a 965 percent increase over last year’s giving.
The pitch – which is sure to be made louder via social media in the next month – is simple: in these times, channel money to those will take on the many coming challenges of the Trump times. In some families, expect fewer gifts of products and more gifts to causes, in the name of the recipient, a movement that Facebook could help multiply.
The (for-profit, if barely profitable) New York Times has clearly made its way onto the list, even as the Times itself has always felt squishy about a closer, member-like relationship with its readers.
The Times now offers deals up to 50% off for gifts, and my sense is these may be part of the acceleration we’ve so far seen. Can it do even more in this “giving” environment?
The Times already allows many of its subscribers to “share” their subscriptions through “All Digital Access.” My sense is that, in one form or another, some number of the Times’ now 2.5 million paying subscribers may warm – this year – to the notion of paying for another subscription for a friend, a relative, an associate – or maybe their favorite Trump supporter.
I further wonder whether the Times migh try a reader-funded Tom’s-like campaign, in which that shoe company sends a “free” pair of shoes to a child in need for every pair bought? Several dozen companies use such a “one-for-one” marketing business model. They build the cost of the second product into their cost structure, and as we know, digital product distribution is close to free.