The New York Times’ new app strategy seems lackluster at best — so what does it do now?

8 Comments

Among the other less-than-optimistic news from the New York Times in its quarterly earnings report earlier this week — the fall in revenue, continued slide in advertising income, and so on — the company also announced some numbers related to its new mobile apps, NYT Now and NYT Opinion. Unfortunately for the Times, the apps have so far failed to set the mobile world on fire. In fact, when looked at in relative terms, they have more or less disappeared without a trace.

As Ryan Chittum at the Columbia Journalism Review and analyst Ken Doctor have described, the Times reported that it added a total of 32,000 digital subscribers in the second quarter — a number that includes all the people who signed up for digital access to the newspaper, as well as those who paid for NYT Now, NYT Opinion and Times Premier, a service that gives subscribers access to members-only discussions and other customized features.

The Times didn’t break out any specific numbers for the apps, but it did say that they and Times Premier accounted for the bulk of the 32,000 number, which for a major international media entity is a vanishingly small figure — even Chittum, who has been an unabashed fan of the NYT’s various paywall strategies, admitted that the company’s new offerings are “off to a poor start.” The NYT Now app doesn’t even show up in the list of top 1,000 apps for the iPhone, and is ranked fairly low in the media category as well.

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Slicing the bread more thinly

When the Times announced its new apps — a strategy that had been highly touted by NYT executives — I wondered whether the paper was trying to slice its existing readership up into niches that would ultimately be too small. Much of the reaction I’ve seen to NYT Now has been that it doesn’t really offer much beyond a selection of the NYT’s stories, and certainly not enough to be worth paying for, given that a variety of free apps (including Yahoo’s mobile News app) provide something roughly equivalent for nothing. NYT Opinion suffers from a similar problem.

What the Times is running up against is the paywall equivalent of the law of diminishing returns: It has already had what — in newspaper terms at least — amounts to a blockbuster success with its existing paywall, signing up 800,000 subscribers and generating hundreds of millions of dollars in revenue. But that has been levelling off in terms of growth for some time. So how many people are there who would want to pay for something like NYT Now or Times Premier, who aren’t already subscribers to the paper itself? Not that many, it seems.

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So what happens now? As Doctor points out, even with the paywall revenue, the Times is still taking on water faster than it can bail the boat: print-advertising revenue fell another 6.6 percent in the most recent quarter, and all of the digital growth barely managed to fill a fraction of that gap — $42 million in revenue from the paper’s digital-only products was a tenth of the Times‘ overall revenue of about $400 million, the bulk of which comes from print advertising.

Bold bets are required

Is there an app or subscription strategy that could boost the paper’s fortunes substantially enough to make a difference? One thing the Times might consider is making NYT Now more about news from everywhere rather than primarily a way of highlighting existing NYT content — readers seem to be flocking to apps and services, and even email newsletters, that help them filter the massive quantities of content that flow past during the average day, whether it’s Yahoo’s News app or Circa or Nuzzel (and the NYT’s internal innovation lab has come up with a Twitter curation tool called Vellum that is quite useful).

BuzzFeed is reportedly headed in this direction with its upcoming app, which will apparently focus on “serious” news, rather than the listicles of cats and other entertainment that many have come to associate with the site. For my part, I think the Times might want to experiment with highly personal apps — either by offering high levels of customization for readers, or even by offering apps that are dedicated to a single NYT writer such as Nicholas Kristof: a kind of central portal for all that writer’s content, with customized levels of engagement for users.

Would any of that make a dent in the Times‘ financial picture? I have no idea, to be honest. But the paper has to start making some bold bets if it wants to fulfill even a small part of the vision outlined in its “innovation report,” and apps (or even a print version) that provide what amounts to a small subsection of its existing news aren’t really going to cut it, I don’t think.

Post and thumbnail images courtesy of Rani Molla

8 Comments

Keith Hawn

this one was too easy to predict. just go check Flurry’s data for the past several years. Games and porno and social media (in that order) dominate mobile time. there is nothing left for The Times – or ANY news publisher – to make any sort of business return on…

Paul Smalera

Matthew, in the NYT Opinion app, you can choose to follow the work of any or all of our main Op-Ed columnists, including Nicholas Kristof. You automatically get their last five columns and/or blog posts. And that’s just the start of what we have planned for that feature. You get that, along with everything else published in the Opinion section, and the new Op-Talk stream of content, for $5.99 a month. How much more of a personal paywall would you like us to build?! :)

Paul Smalera
Editor, NYT Opinion

Mathew Ingram

Thanks for the comment, Paul — I am really glad to hear about that feature, and that you have more things planned along the same lines. Looking forward to seeing what you come up with!

philo-farnsworth

I have a NYT web subscription, but gave up on their apps long ago. They always wanted to charge again for the content – like with their early iPad app. They’ve lost my attention, and are virtually unable to command my attention again. It’s called bad-deal-fatigue.

Ryan Chittum

Mathew,
I don’t think “admit” is the right word, frankly, since I predicted it: “Don’t expect those to make a huge difference to the bottom line, but we’ll have to wait until July to find out how big it might be.”
And: “It seems unlikely that NYT Now will make much if any direct difference to the Times’s bottom line. But it doesn’t have to snag hundreds of thousands of subscribers to be a good investment. If existing subscribers come to view it as an essential part of their subscriptions, and if the lessons in mobile news that the Times will learn from it make NYT Now worth the relatively small investment.”

Just sayin’.

Dan Yurman

Platforms also matter in terms of market penetration. So far the NYT has mostly invested in Apple iPad and iPhone apps and, for the most part with new apps, disregarded the Android environment., Perhaps this is due to the upper crust demographics of Apple device users which are obviously more lucrative as targets for advertisers than mass market Android users.

That said, the risk of “diminishing returns” referred to in the article might also apply to readership segmentation by device. Eventually, the newspaper’s Apple centric strategy could collide with the limits on overall market share of Apple devices.

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