The forces behind the New York Times record quarter in new digital subscriptions

Last week, discussing its quarterly earnings, the New York Times reported spectacular growth for paying readers: 276,000 net new digital subscribers for the last three months of the year. “The single best quarter since 2011, the year the pay model launched”, according to the company.  The Times now has 1.6 million digital subs who brought in $223 million in 2016 — a revenue line that didn’t exist six years ago.

A look at the ARPU (Average Revenue per User) compared to unpaid models (such as Buzzfeed) and distribution platforms shows the importance of paying subscribers in the Times’ economics. The ARPU of a digital subscriber is 7x higher than the average non-paid reader of the NYT, and 46x higher that the advertising revenue spread on the Times’ entire audience.

Three factors contribute to the resurgence of paid-for news.

1. The weakness of digital advertising for news, as tech giants Facebook and Google eat the entire advertising pie.
2. The rise of Fake News. Mostly spread over Facebook, the phenomenon fueled the discredit of the pervasive social network where 45 percent of Americans first get their news.
3. Misleading Trump Communication. With people now leading the country who repeatedly lie and mislead their constituents, a large segment of the audience, regardless of political affiliation, acknowledges the need for fact-checked information.

The New York Times is a key driver of trust in news dissemination. It swiftly hooks in on this trend with its latest advertising campaign.

Source: Monday Note