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In a commencement address to business students at Columbia University, New York Times(s nyt) CEO Mark Thompson hailed the company’s digital subscription strategy and dismissed skeptics who say media outlets can’t reinvent themselves.
“[T]he launch of the pay model is the most important and most successful business decision made by The New York Times in many years. We have around 700,000 paid digital subscribers across the company’s products so far and a new nine-figure revenue stream that is still growing.”
Thompson added that media pundits predicted that the Times’ subscription model, which is based on a so-called “metered paywall,” would be a disaster when it launched in 2011. Since then, he noted, it’s become a standard for the rest of the newspaper industry. “In modern media, you could make the case that the best way forward is to listen carefully to what the industry has to say and then do the exact opposite.”
Thompson also equated disruptions in the news business to what’s happening in other industries, like high tech and car rental, and said that risk-taking is the secret of America’s culture of innovation and entrepreneurship.
Commencement speeches are, by nature, restricted to this sort of soaring stuff. A skeptic, however, might note that the New York Times‘ digital subscription model has already begun to plateau and that the company is still shedding ad dollars and assets. Likewise, Thompson, who arrived from the BBC only months ago, still has to prove he can run an institution that isn’t supported by mandatory contributions from the public.
But the tone of Thompson’s speech is the right one, and it’s welcome to see the New York Times waving its banner not just in the safe halls of Columbia’s journalism school but among the MBA crowd as well. If you want to read more of what he said, here’s a longer excerpt:
The American news business is living through revolutionary times. For The New York Times, which I joined six months ago, it means catapulting the Grey Lady into a world very different from the one in which she spent her first century and a half: multimedia, multi-platform, multi pretty much everything.
There are some things we’re not going to take risks with. The quality, authority and accuracy of our journalism. Our values, including the time-honoured but still vital tradition of keeping our journalism independent from the commercial interests of the company. In the age of so-called ‘native’ advertising in which the boundary between editorial and commercial content is more and more frequently blurred, that tradition of maintaining a clear line between the journalism and the business of The New York Times is more important than ever.
But we will not secure the future of The Times without the kind of bold innovation – in products and services, in
business-model – which is intrinsically and necessarily risky. Two years ago The Times launched a new digital pay model, essentially asking users of The Times on digital to do what more than a million print users of the newspaper were already doing, which is to pay a regular subscription in return for extensive access to our journalism.
The consensus among the experts was that it wouldn’t work, was foolhardy in fact and not needed. People just weren’t prepared to pay for high quality content on the internet and, besides, wasn’t digital advertising enough – wouldn’t it grow until, just as with print advertising in the golden age of physical newspapers, it alone was enough to support America’s newsrooms?
In fact the launch of the pay model is the most important and most successful business decision made by The New York Times in many years. We have around 700,000 paid digital subscribers across the company’s products so far and a new nine-figure revenue-stream which is still growing. Much of the rest of the US newspaper industry is now following suit. And developing this pay model, launching a suite of new subscription products to attract additional new subscribers, is central to our plans for the future.
What’s interesting, though, was that initial widespread skepticism. It won’t work. It’s mad. They’re barking up the
In many ways, the thing that gets disrupted in a disruptive age is the conventional wisdom. Wherever you end up, in this country or abroad, starting your own business or joining an established company large or small, you’ll bump into conventional wisdom and all the apparently excellent advice that flows from it. But the definition of a disruptive age is one in which the discontinuities outnumber and overwhelm the continuities and in which predictions based on the past or the smooth projection of current trends into the future frequently prove unsound. Conventional wisdom tries valiantly to keep up, to recalibrate in the light of recent developments, but because it cannot foresee transformational breakthroughs or the kind of behavioral and business-model pivots which digital technology makes possible, it never can.
Take my industry. The movies are finished. TV advertising is dead. Exactly what happened to music will happen to TV. Nobody wants news anymore. No one will ever pay for anything on the internet. Not just said, but said widely and widely believed. And – for the most part and within the time horizon which the prophets themselves were suggesting – just plain wrong.
All of the strategically successful things I’ve been involved in – whether a set of new TV channels or developing the BBC’s digital on-demand service, the i-Player – have had this thing in common: that, at the point of launch, pretty much everyone not involved in the project has agreed that it was going to be a total disaster. In modern media, you could make the case that the best way forward is to listen carefully to what the industry has to say and then do the exact opposite.