More subscribers to the digital N Y Times

The 3rd quarter results of the New York Times Company show how a good strategy pays in this troubled period and teaches a lesson to some other actors of the media world.

The operating profit is up by 44% at 12.8 millions dollars, not because of advertising which keeps sliding down, minus 1.6% for print advertising and minus 3% for digital advertising.

However, the number of subscribers to the digital only service has grown by 28% in one year, reaching the stunning figure of 727000.

What does it mean? First, advertising has a very limited future in the digital economy. It is co-opted by a small number of very big operators such as Google, Facebook or Twitter who invest now in the mobile services and leave a very small space to the news providers. This situation is not about to change in spite of the relative success of video. Millions of news users don't compare to hundred of millions of Facebook clients.

Then, the only hope for news services is paid subscription but to succeed, you have to offer a real service at a correct price. If I may use my own experience, I can state that I consider my subscription to the digital NYT ,which I can use on my computer and my smartphone, is rather cheap, 12 euros per month. For that price, I have access to the gigantic data bank of a world newspaper and the 1000 journalists of its newsroom.

What about France? The subscription to dailies is rather expensive, 14 euros per month with a very limited offer of national and world news. The only newspaper which can develop a notable audience in the francophone world is le Monde but its rates are probably too high and its access to free news is too generous. Why would you spend 170 euros a year if you get for free the main pieces of information?

What media groups face the digital challenge?

Some news give a lot of food for thought.

Take for instance, the nomination of a Richard Berke, a top editor of the New York Times at a commanding position at Politico, the influential news website which keeps growing and is getting profitable.

Take also the policy of the two most dynamic European media groups, Springer and Schibsted. At the INMA News Media Conference that took place in Berlin last week, the matter was discussed as there are not so many successful medias these days. What did the German and the Norwegian groups do to survive and grow? They followed a long term involvement in digital activities, most of them not connected to news collection.
Last July, Springer sold many newspapers and magazines to finance its new ventures in digital activities. The owner of Seloger and Aufeminin makes 40% of its revenues with its digital branch and intends to go on.

Schibsted started 15 years ago to invest in digital classified and is now an European leader with Blocket.se and Leboncoin.fr It is still the owner of major newspapers in Sweden and Norway which are politically useful but sooner or later, it will have to drop out of the print industry. By now digital ads make 25% of its revenues.

It is not a coincidence if these two groups are very profitable and hence, able to invest even more.

The New York Times keeps moving

If one compares the Washington Post and the New York Times, one can see the staggering difference between a daily which is successfully moving from print to web, the Times and another one which has let Politico pick up its best journalists and its top customers, the Post. It is hard to figure what Jeff Bezos is going to do to repair a fairly hopeless situation.

In the Guardian of Monday 14, Jill Abramson, the executive editor of the Times, explains what her vibrant newsroom is doing. It is playing the best card to boost the digital audience and attract advertising: the development of video, motion graphics and animation. Still the 1000 journalists newsroom keeps investigating on China, Apple or Bengladesh.

With 700000 thousands paying subscribers (one third out of the US) and 59 millions unique visitors, the Times is becoming a world global news provider. Competition will be tough for the other English speaking websites.

However, the interview hinted at a management problem which most newspapers will have to face: with the increasing importance of marketing and ambitious market research, the part played by the CEO is getting more important and perhaps, more intrusive. It is a touchy topic for Jill Abramson who has to live and work with Mark Thomson, the ex director general of the BBC.