The New York Times put a virtual stake in the ground on Wednesday, laying out its mission to double its digital revenue to $800 million by 2020. Despite the grand declaration, Wall Street shrugged, as shares remained flat in midday trading.
Chief executive officer Mark Thompson and executive editor Dean Baquet made the bullish statement on Wednesday in a memo to staff, following the announcement of the company’s third-quarter earnings release on Oct. 29.
In the note, Baquet and Thompson spoke of a “shared sense of urgency” in transitioning the business toward digital. Over the past five years, The Times has doubled its digital revenue to $400 million in 2014, and in the next five it hopes to do the same.
“Achieve that and we will secure our journalistic mission for the long-term as well as create one of the world’s most successful digital content businesses,” the memo said.
In order to accomplish this, the execs explained that they must “keep our costs in mind in the years to come,” but added that the message was one of “growth,” not cuts.
Still, it’s hard to escape the fact that the newspaper’s recent growth in second-quarter profit to $16.4 million was linked in part to cost cuts. Revenue slid 1.5 percent to $382.7 million, due to shrinking print advertising revenue. Last year, the company also slashed 100 newsroom jobs in a move that would help facilitate its transition to becoming a more robust digital business.
The Times laid out its digital strategy for the next few years in a second note called “Our Path Forward.” The 11-page document, written by Baquet and upper management on the business side, described the challenge of growing its digital readership and digital revenue to meet their “enduring commitments to journalism and readers.”
“Twelve percent of our digital readers deliver 90 percent of our total digital revenue. To double our digital revenue, we need to more than double the number of these most loyal readers,” the memo said. “We will need to develop them increasingly from younger demographics and international audiences. This will require new thinking in journalism, product and marketing. Our print product is a vital ingredient in the mix for many of our most engaged digital readers. We must ensure that it, too, remains relevant and valuable in this digital-centric era.”
The company said it wants to create a “daily habit” out of reading the digital news report as it has done with the newspaper. One solution is the development of digital lifestyle and culture products like “Cooking,” the company offered. The Times turned to its business model, which focuses on subscription first, then advertising and unique monthly page views.
“Many of our competitors focus primarily on attracting as many uniques as they can with a view to building an advertising-only business. We see our business as a subscription service first, which requires us to offer journalism and products worth paying for. Our focus on quality and a deep engagement with readers is also a competitive advantage in advertising, which at its best is driven by unique consumer insight and superior creative work,” the company said, emphasizing a shift of focus to the reader rather than the platform.
The Times said it would have a series of sessions with Baquet and Thompson that will allow staffers to ask questions and provide feedback. Chairman and publisher Arthur Sulzberger Jr. will also host a “State of The Times” gathering next month to keep the lines of communication open.
The memo ended in a flurry addressing the need for communication — which ironically isn’t the hallmark of most media companies.
“What’s needed adds up to a transformation of the company. Responsibility begins at the top. We know that a lack of unity or clarity among senior leaders can slow everyone down. That’s why we’ve developed this new thinking together. This is not a newsroom plan or a revenue plan or a corporate plan. It’s our plan. We all made it and we all back it because we all want the same thing — the future success of The New York Times.”