Nieman Foundation at Harvard
Imagine a world in which Donald Trump is no longer President.
No, really. Okay, if that concept’s beyond your immediate comprehension, let’s make the question a bit more concrete: Imagine what’ll happen to the news business in a world in which Donald Trump is no longer president.
Yes, the Trump Bump in digital subscriptions is long gone, replaced by a steadier, lower-key growth rate for The New York Times, The Washington Post, and others. But traffic continues to go through the roof, alongside the nation’s temper. No one has ever seen news days, or news weeks, like this. Like all things, it’s unlikely to last.
So the business question: If you ran a news company and could anticipate this future non-Trump time — one in which national attention isn’t riveted to every god-forbid smartphone notification — how might you prepare?
You might pay more and more attention to the non-national news interests of your readers, like focusing on their lives well beyond the politics of the day.
That’s the place that The New York Times’ new Wirecutter Money fits. Wirecutter Money is in a slow rollout, having begun populating its pages midsummer, says Mat Yurow, director of Wirecutter Money.
But even at this stage, we can see the insurance policy that CEO Mark Thompson’s strategy investments are now buying. That strategy has propelled to Times to consistent year-over-year revenue growth — despite the great print ad downturn afflicting publishers.
By itself, Wirecutter Money is small. A half-dozen new Times staffers: an editor, an engineer, two writers, a product designer, and a compliance manager. (Wirecutter overall employs nearly 125.)
It’s Wirecutter’s newest sharp edge. The Times bought the site, then focused mainly on electronics and some on home goods through its Sweethome companion site, in 2016 and has been quietly expanding its range and number of products offered since then.
One reason Wirecutter Money is important to note: “It is the first time that we have made a really strong, big investment in coverage of non-products,” says Yurow. It’s all about services, and in services, there’s a lot of money.
Add to that the Times’ Smarter Living expansion. Smarter Living, in its own series of lifestyle sitelets, newsletters, and guides, aims at the Times’ reader’s whole life, restyling the old features of yesteryear into timely guides — on tipping Uber drivers, maintaining digital security, or eating like a local abroad.
That reader is well off: In digital, their median household income is $95,000; in print, $189,000.) It’s a readership high in opinion leaders, power elitists, influentials, affluents, and most importantly, spenders.
Wirecutter stands parallel to the core business. David Perpich, who used to head up product strategy for the mothership, took over leadership of it in January 2017. It both stands apart from the Times — most of its traffic still comes via search — and carefully integrates with the Times when news and consumer content converge.
It’s 25- to 34-year-olds who make up Wirecutter’s largest customer segment. Wirecutter Money stretches into other parts of their lives, as it firmly focuses on the financial lives of millennials.
“The goal of that is really to try to empower young adults to navigate major financial milestones, and we’re calling those financial firsts — those really sticky subjects that every young person is going to have to navigate at some point in time as they work their way up to financial independence,” says Yurow.
“We’re really thinking about how to help this group of individuals who feel a tremendous amount of financial anxiety or anxiety around their personal finances. We want to give them a trustworthy resource that they can go to and really navigate these major milestones in their lives as they graduate from college, or as they take on student loans, buy a home, as they get married.” That’s a life-cycle-driven, “lifetime value” strategy.
Yurow, who had served as Wirecutter’s head of strategy before taking on the Money launch, says the Times learned from watching its readers. “We had noticed there was an interest in this type of coverage. Smarter Living has pushed a lot of momentum forward in having really honest and open conversations about managing money and the impact that it has on our lives. It felt really aligned to the interest and the brand and the authority and the trust that Wirecutter brings to the table for The New York Times, and so it really was this perfect combination of data and sheer passion.”
If the Times’ news coverage raises its readers’ blood pressure, consider these consumer forays a mild anti-anxiety OTC medication.
“Many of the Wirecutter staff is of this generation that’s felt these anxieties. And we felt like entering now at a time when student loan and credit card debt are an all-time high, when our youngest generations are feeling scared and confused and resentful about how the financial world works, that this was the perfect time for Wirecutter Money.”
In early September, Wirecutter Money published “The Best Cash-Back Credit Cards.” It is the kind of piece you might see on its personal-finance competitors, like Mint, Credit Karma, Nerd Wallet, Bankrate, or The Points Guy.
While search (and links from the Times itself) will drive traffic, Yurow hopes to make the site into a destination of its own.
“I’m hoping that we can build this landing page into a little bit more of a static experience, so that when you know that you’re about to approach one of these major financial milestones, you know where to go and where to find the information that you’re looking for and that you’ve got a sense of completion.” Wirecutter Money offers a mix of original content and pieces taken from the Times’ archive.
Perpich makes the point the Times learned from its new product development successes and failures: “One of the lessons that the Times’ learned and I certainly learned with NYT Now, was that we tried to solve product market fit and monetization at the same time,” Perpich says. “When what we should have said is: Let’s figure out product markets with a sense of what kind of scale we need to get to. And thankfully, that was the pivot we made with Cooking. We actually originally were going to launch with a paywall and we said, ‘Let’s hold back.’ The most important thing is that we create something that people love, and then we can get to a scale that would be meaningful enough to make the investment you need to be able to do monetization right.”
That means Money will be testing lots of guides and product recommendations well into next year to see what works. Though affiliate revenue will drive its business, it isn’t yet working that stream yet, and says it won’t until the business is more fully developed.
Wirecutter Money feels a lot like Wirecutter overall, but Perpich makes the point that it’s enough of a departure from the company’s roots to need special guidance.
“The reason that we set this up as a discrete team is just it’s been honestly my experience creating new things — realizing that you need real energy and time and dedication to be able to do it. It’s in a space that’s not like all the others. It’s not recommending a router — it’s a much more complicated thing.” The sort of information a reader needs depends on a wider set of circumstances — age, career, debt load, current financial position. “So, everything from the tech that you need to build, to the regulations you need to be aware of, to thinking about how you take that same Wirecutter kind of ethos but deal with a very different kind of situation and context” — those differences led Perpich to think the Times should “put a team of people against it and give them space.”
Back to that seemingly distant question: What if national political times, at some point, take a deep breath? Where would these products place the Times against its competition, and most specifically against Competitor No. 1, The Washington Post? The Post has not yet put the same gears in motion as the Times, but should be having the same conversations. (And one imagines a Jeff Bezos-owned company would start any affiliate/commerce-driven endeavor with an edge in market intelligence.)
The Times set its non-news plan into motion years ago. Over the years, CEO Thompson has green-lit a number of projects, while flashing red at a few others that didn’t pan out.
Most notably, the Times — almost alone among its peers — has built two significant non-news subscription products. Together, the Crossword and Cooking products now total about half a million discrete subscriptions. Overall, they make up 17 percent of the Times’ total digital subscriptions (though, as lower-priced products, they only contribute about 5 percent of digital subscription revenue).
Though the dollars are still smallish — a $20 million-plus annual run rate — the non-news products are growing at an annual rate above 60 percent, both in subscription number and revenue.
Of strategic significance: Like international digital subscription sales, which now make up about 13 percent of the total, they represent a diversification beyond the U.S. news market.
By late 2018, Thompson had hoped to have a fourth, if not fifth, digital subscription product in the market. Watching — which early on saw emerging new reader needs in the age of Netflix and Amazon nirvana — never figured out a subscriber proposition, though it continues to drive traffic for the Times. Health, too, has long been under consideration.
Next up on the paid front: parenting. The Times indicated in the spring that it would launch a subscription parenting product; this week, the company told me it’s on track for a prototype release later this year.
Consider Wirecutter a double diversification strategy. Diversification of reader interest and diversification of revenue stream.
Subscribers don’t directly drive their revenue; Amazon does, as the fulfillment partner that drives most of the site’s revenue. The affiliate revenue shares Wirecutter earns off of reader purchases — clearly explained on the site — drive its revenue, which has surpassed $20 million. That’s up 50 percent since the acquisition, Perpich says.
There is one news company that has practiced a similar approach for most of this decade. That’s Schibsted, the Oslo-based international innovation leader. Years ago, Schibsted began investing a range of consumer-facing businesses, from insurance to personal finance to price comparison to wine buying. Today, Schibsted Growth drives a good share of the company’s revenue and building profit. (We have long covered Schibsted’s serial innovations here at the Lab.) Schibsted still stands as a global leader in business model innovation — finding new ways to pay for news.
Forget news, though, for a moment, and think about a greater lesson in these initiatives: the bid to regain habit. Habit droves newspaper readership (and broadcast news consumption) for decades, until it was decimated by digital, with only the news check-in smartphone habit for national news now reviving it a bit.
For the Times, it’s about acting judiciously when it comes to its trusted relationships with readers (as Gizmodo Media Group did with its ecommerce leadership) and with rebuilding the habit, a revival of another old concept: service journalism, something the better dailies practiced well in their heyday. (Indeed, it was the Times in the 1970s under Abe Rosenthal that led the way in boosting service journalism and “softer” feature sections to both broaden readership and satisfy advertisers.)
These products — from Crosswords and Cooking to Smarter Living and the Wirecutters — provide new on-ramps to habit formation. “Smarter Living is giving you advice on how to live a better life,” Perpich says. “And Wirecutter’s helping you get the gear you need to do it.” In those two sentences, we see a new frontier of 2020s business models for the news companies that may thrive.
