How does a print newspaper stay in business in a world of digital publications and online advertising? Freelance writer Gabriel Snyder went deep into the New York Times organization to find out. On Recode Media, Snyder spoke with Peter Kafka about how the Times attempts to balance subscriptions revenue with advertising and the difficulties it faces as it tries to become more like a Spotify or a Netflix.
You can read some of the highlights from the interview at that link, or listen to it in the audio player above. Below, we’ve posted a lightly edited complete transcript of their conversation.
Peter Kafka: I’m here with Gabriel Snyder, who has many titles and has done many things. Can I call you Gabe? I’ll call you Gabe.
Gabriel Snyder: I prefer Gabriel, actually.
Well if it’s Gabriel then that’s your name. Gabriel Snyder has the Wired cover story that is out as we speak, it is about the future of the New York Times. Welcome, Gabriel.
Thank you for having me.
Sorry for butchering your name.
That’s all right. Thank you for asking. I don’t have a huge preference but I really like the people who ask.
This is my new thing: At the beginning of each podcast, I screw up someone’s name. I say did I get it right and they’re kind of like, “Not really.” Then we start from there.
Let’s talk about the future of the New York Times. So you spent some time with them, you got a lot of access. And you conclude what ... The cover of Wired, by the way, is A.G. Sulzberger Jr. The third, which Sulzberger is he?
He’s just Arthur Greg Sulzberger, no juniors or seniors.
He’s effectively the third.
No, he is the fifth generation of the family to take over.
I just screwed up the entire podcast.
Well, he hasn’t taken over, but he was designated deputy publisher, which puts him on track to succeed his father as publisher and chairman.
So this is the man who is going to lead the New York Times, from the Sulzberger family. He’s on the cover, you get to talk with him. The New York Times generates a lot of attention quite rightly, it’s the most important newspaper, I think, in the world. And their future has been sort of in doubt for a while. I think people feel like it’s in better footing now. What do you think?
Well, I kind of went into this as someone who started this project late last summer, early fall, and at that point it felt like kind of just a topic of media panels. Of how long is the New York Times going to last.
When will the New York Times stop printing the print edition.
Exactly. I’ve always been a great admirer of it as a journalistic institution and I think that some of the conversations that you and I were probably having eight years ago around the financial crisis, whether or not they were looking at bankruptcy then, and ever since then they’ve been trying a lot of different things. Their journalism has remained excellent but I think the open question is just from the finances.
Do they have enough money to ... Their goals is to keep a 1,300-person newsroom going. I think a lot of the math has said that cost structure is challenging given what’s happening in advertising. After spending a lot of time with him, I think I’m a little less skeptical [but] I think there’s a lot of distance to go. Basically what they have to point to to give them optimism has been a really impressive growth of their digital subscription business.
They’re now at what, three million subscribers?
I think that’s the number they like to use, which is combined print and digital. If you just look at ... and they keep on rolling up their digital number that now includes crosswords — which is great, I love the crossword app.
It’s people paying the money for digital product. So they’re all-around digital subscriber number is what?
I tend to look at the core news subscription because that’s the one that costs a lot of money. That one starts at about $200 bucks a year, and that one’s just over 1.5 [million]. And then you have another, I think, a couple 100,000 on the crosswords.
So one that’s impressive, there were people — including people I work with — who said they would never get to a million. They were going to be sort of fundamentally capped. And two, that number has grown a lot since Trump, right? Since the election.
Trump is bad for the country in many ways. Good for journalism in some ways, and it’s been good for the New York Times subscription business.
Absolutely, they had a monster fourth quarter because of the election. They had 276,000 new subscribers coming online. So, that’s basically nearly a 20 percent increase just in one quarter.
So what they’ve been saying, unofficially, they said to you in a more official way is, we’re kind of moving our whole business model to subscriptions. We’re still selling advertising, we’re still selling advertising in the print edition, we’re still selling in the digital edition, but we think our future is going to be consumers paying us directly for this product. Like Netflix, like HBO.
Yeah. I was surprised to hear that kind of emphasis. I mean, I think the piece I wrote mainly focuses on the subscription business and that’s because most of the attention at the Times is focused on building the subscription business. I think I should caveat that with saying that they still spend a lot of effort selling advertising. They have a whole native T Brand Studios, which is sort of their ad agency, their internal ad agency.
Every big publisher now is also an advertising agency and makes their own ads.
So they’re doing tons of work on ads and ads are still a major, major component of their revenue picture, but if I were to synthesize, to describe it, I think they are basically managing a decline in advertising while trying to grow subscribers would be the way I would describe how they’re handling these two sides of business.
They’re going to have ads to sell for years, just like, by the way, they’re going to sell print subscriptions for years, because some people still want to read the New York Times that way, it’s a big important part of their business. I think Dean Baquet, a year ago maybe, told me that the Sunday Times print edition is still the biggest part of their business. Post-op.
So when you hear them say, “This is where we’re moving, we’re going to become HBO, we’re going to become Netflix,” those are their words, by the way. They’re bringing up HBO, they’re bringing up Netflix. They’re bringing up two of the most successful subscription businesses. That’s not an accident. What do you think of those aspirations? Those are big. I think Netflix has over 50 million subscribers in the U.S.
The other one they bring up a lot is Spotify, which they did a deal with where they bundle the subscription if you buy a Times subscription.
It’s 40 million subscribers around the world.
So I think what they’re saying in that comparison is they don’t see themselves in the same business as Netflix, and Spotify, and HBO, and making entertainment. Their core product remains journalism. I think the way they are thinking about their digital strategy now is that they understand that the pure service of providing the news of the day has a capped audience. There’s only so many people who need that, and so what they’re largely, I think, taking a lot of inspiration from is a lot of what happened in the 1970s when under Arthur Sulzberger Senior, the father of the current publisher, and Abe Rosenthal had rolled out all of these themed sections. Like the dining section, and the living section.
Right. The things that are completely standard in any newspaper, but for the New York Times in the 1970s was an astonishing break from tradition.
Absolutely, and then they were doing crazy things like printing photos. It was going from a very staid, serious, sober newspaper, and they’re responding to the changes mainly in the local market in New York. This is the battle of the ’70s when their upscale audience was moving out into the suburbs and then you also had a very vibrant newspaper market. Murdoch had just moved in with the Post, the Daily News was a thriving entity, and even Newsday had started a Manhattan edition, and so they were losing that competition for sort of that serious news audience.
So they loosened their tie ever so slightly and said here’s a recipe.
Yeah, exactly. And they went after both. They were following the readers out to the suburbs into their big houses and the department stores that they shopped at, and that’s also where the advertisers were, and so they made a very big play to broaden the New York Times brand from being just a news brand and into being sort of a lifestyle brand.
And I think that’s what they’re thinking about the opportunity in the digital space right now, is that when they make a cooking app or they just bought The Wirecutter, which is a gadget review site, that they can roll in services like that into their subscription so that they’re not trying to convince you just to pay for foreign and political coverage, but also because you like being able to save recipes on the cooking app.
So this is one of things I was little confused on when I read the piece, which is very good. Do they expect that these are going to be new products that they sell separately or it all gets bundled in for the same 15 to 20 bucks a month?
So I think that’s been the big shift that they’ve had and I think that’s where I was thinking, I got caught up ... About three years ago they launched a suite of products like Opinion, Crosswords ...
There was a mobile app, NYT Now.
NYT Now, cooking was one of those, and the idea was that each of those was going to be a standalone product that they were going to sell a subscription to. They had varying levels of unsuccess in that proposition. Opinion really didn’t have an audience, NYT Now had an audience but no one wanted to pay for it, they didn’t even bother trying to charge people for Cooking, they kind of just made if free. What they’ve kind of given up on, and not entirely, but I think the emphasis is now they don’t see the ability to stand up new free-standing businesses, that their energy and their resources are better invested into marketing one core product rather than trying to create ...
With new bells and whistles, and cool stuff in the Dining section, and recipes you can save. Instead of saying, “Here’s a recipe app. Would you like to buy it?”
And the answer would be, “No.” So I remember when they rolled out NYT Now. They went to South by Southwest and they hosted a party, the food was very nice, and they were showing off the app. And I remember them explaining to someone who does what I do, I think it was TechCrunch, it has this feature, and this feature, that’s all very cool. And it’s going to cost, I can’t remember what the pricing was, but it cost something.
It was like eight bucks a month.
And the TechCrunch writer said, “Well I’m not going to pay for that, no one will pay for that.” That guy was pretty rude but he was right. No one was going to pay for it. The Times was convinced there was some delta between zero and one, and once you got someone to pay something you could charge eight bucks or five bucks or whatever it was. They were very wrong. No one wanted to buy it, so my question is do you think that we should give them credit for being the guys to figure out, “Oh, this strategy didn’t work, we’re going to pivot,” or do you go, “Boy these guys really got it wrong a couple of years ago, they were way off and that makes me worried that they’re not going to be able to steer the ship going forward.”
Mm-hmm. I don’t think those views are necessarily mutually exclusive.
That’s a good answer, Gabriel.
They would certainly say that they are ... They point to the NYT Now app as a successful failure that they killed it quick enough. All of what they liked about the interface that they developed in the app they pretty much poured it over into the main app, and so it’s kind of remembered now as a research expense.
Right, and this sort of burnishes the idea that we’re a technology company ... they don’t want to be a technology company, but we’re just like a Silicon Valley company where we have failures and failure is plotted.
And actually I think that you can be glib about that ...
But this notion of failure is a really important culture difference between a journalistic organization and a technology organization, certainly an organization like the New York Times. If you were to describe ... One of the words that came up a lot in the discussions was “Timesian” and sort of people deciding what was up to the standards and not up to the standards. There is not a lot room for failure in that discussion. The New York Times, the Wall Street Journal and lots of other news organizations are places where journalists take corrections seriously. They’re going for perfection every day and the idea that you do something and it doesn’t work out can be viewed as a career killer.
I come from that world, so it’s a little bit weird when I talk to tech people, but the tech people that I talk to that believe in fail fast and all that, they mean it, and there is this sort of noble failure. Having those two cultures live side by side is not natural and it’s caused a lot of friction at lots of journalistic organizations including the Times, but I think they now kind of view there’s a kumbaya around the NYT Now that I think they kind of celebrate. It’s as much an example of being smart about developing technology but as sort of a cultural moment that they were able to somehow kill off a project without anyone feeling like they were going to lose their job for it.
So one of the tropes of Silicon Valley is the founder’s CEO is the spirit of the company, the successful ones, when it comes to a Steve Jobs or a Bill Gates or Larry and Sundar at Google, they’re the ones who have real authority to make drastic changes. They’re the ones who’re empowered to do it. If you bring in professional managers, it’s always eventually that things sort of decline.
The Times is a very different model, which is you’ve got one family that own the thing and have run it since inception. Fifth-generation Sulzberger, like you said. Do you feel like someone who has been born into the New York Times has the ability to make whatever sort of drastic directions and changes you would need to make the Times survive, or is the argument, “No, because he’s family he’s not going to make a hard right, he’s going to keep that through line.”
A.G. Sulzberger was, step back a couple of years ago, he authored, headed up an innovation taskforce. In which he produced what has become a very internal white paper ...
The Innovation Report.
I thought it was really interesting, what he told me about that report is he was kind of saying ... I didn’t see anything special or innovative in The Innovation Report as far as new ideas; it turned into a cultural change document. That way that it, I think a little bit unintentionally, it was meant for maybe six people at the top of the company when it was commissioned and then it got leaked.
Yeah. I was surprised when I read that, when you said it was leaked. I just assumed it was supposed to be leaked.
Of course, it would be. That’s how you get Silicon Valley to leak the memo. Also, if you construct a memo in any company it gets out eventually, especially at a news company where they gossip like fiends. So I mean it was shocking that he was shocked it was leaked.
Well, based on what he and a couple other people who were involved were saying was that it wasn’t supposed to leak.
One of the reasons it wasn’t supposed to be leaked was they were interviewing people, and they quoted people, and so when they went to people and said, “We want to talk to you about this,” there was some assurances made that it wasn’t going to be posted on the website. I think it remains a mystery as to who leaked it, and why. There are lots and lots of compelling theories.
He says that once it did come out that it made, I’m paraphrasing his quote, but it made it clear that the status quo wasn’t an option and that change had to be done and so the productive conversation is, how do you change? Lots of people could’ve said that, lots of people have said that, but it was one of the reasons why people paid so much attention to that report was that he was the likely heir, even at that point he wasn’t officially.
Right, there was a bake-off between him, Sam Dolnick and [David] Perpich. Again, when you’re reading it from the outside like you and I were, you’re saying things like, “Of course, no shit, Huffington Post and BuzzFeed do a better job distributing news socially than we do.” You’re like, “Yes, of course,” but for the Times to even acknowledge that, and even acknowledge maybe they should take some lessons from these companies about how to make their great journalism spread, was a big deal, and a big deal for them to even accept that that was a thing they should work at.
Yeah. This has been something that I have found myself in some of these digital legacy conflicts of news organizations both large and small ... I went to go work with a large news organization that shall remain nameless for a second, and I think the thinking that people had going in is that, “They must be just idiots here. They don’t understand how the world has been changed by the internet, and they’re still trying to do things the old way,” and I think that is the most common misconception about old media and that people are unaware ...
Some of them are.
Some are, but I think the people who are making decisions rarely are.
At least now.
I would say this goes back pretty far. I think the reason why old media had so much trouble adapting is not because they don’t know what to do, or even that they should do it. It’s because the internal politics of it are so difficult to navigate.
There’s internal politics, there’s business implications, and this is what I write about all the time is all these media industries music, movies, television ... Music had a bunch of dumb people in it during the Napster era, but eventually they figured out file sharing’s a thing, it’s not going away, people aren’t going to pay for music anymore, we’ve got to accept that. They all figured that out by 2005; it took them another decade at least to even move to a streaming model.
Even that, you could still argue that they’re moving way too slowly. And they’re not dumb, it’s just there’s real repercussions to radically changing your business model. It means you’re going to miss the next quarter, or next five quarters, or maybe more.
Yeah. There’s protecting the legacy business, and even today the vast majority of revenue comes from old streams at the New York Times. It comes from that print circulation, it comes from even their print advertising, which is ... I think the industry fell off a cliff last year, but it still generates a lot of money. You can’t just turn that off, and if you do it’s at your peril.
The Times is also an interesting place in that it’s a really big organization, and big organizations have politics. One of the things that’s always been the case at the Times is that, one of my first jobs was covering the Times for the New York Observer when I wrote their media column, and every week you could come up with a new story about every single memo and decision meant for the succession rate for the next editor.
I think when you work at a place like that you kind of advance along a slow-moving treadmill until you get up higher, and that makes it very difficult to introduce new skills into an organization. You can see it both in the top end and in the rising younger people. In the top end, I think the best example of what this means is what happened with the dismissal of Jill Abramson. What led to the proximate cause that led Arthur Sulzberger to dismiss her was her decision to hire Janine Gibson from the Guardian U.S., which was a very successful journalism operation, and to bring her over to be a top editor at the Times. That led to a total revolt and eventually led to an either-her-or-me kind of decision for Arthur.
And by the way, Janine Gibson did not come. She’s now at BuzzFeed.
She’s at BuzzFeed now, and I think she turned it down, probably wisely, because there was so much opposition to outsiders in an organization like that. On the other side, the Times keeps on losing their digital bright stars because they’re looking at a possibility where if you’re someone who’s in your 30s or 40s you’re 20 years away from a leadership position at the New York Times. All of your contemporaries are running companies or newsrooms and you’re looking at 20 years of working through middle management.
Right, and that’s even if you’re doing well there. I’ve talked to people who are rising stars there and they’re like, “Well that’s fine, but I don’t want to wait 20 years to ascend to whatever position that is,” and by the way that position’s not all that great, especially 20 years from now.
Yeah. Thinking about that, stepping back, that’s actually sort of a wonky Clay Christensen-style organizational theories problem, but it is sort of how do you elevate new skills into an organization that is highly bureaucratic. I think A.G. and the Innovation Report was sort of a cultural change moment where they were kind of trying to break up some of those log jams.
So we’ve talked about business models for a bit and I have neglected to support my business model, which is advertising, so we can listen to this for free. We’re going to hear from an advertiser right now.
And we’re back with Gabriel Snyder, freelance writer extraordinaire. What is your day job, because you’re not writing New York Times cover stories, Wired magazine cover stories day to day? What’s paying your rent, Gabriel?
What is paying my rent? Wired magazine this month.
So, that’s nice.
Being elusive. Just want to get wonky here, we were getting wonky before, about the construction of a story like this.
The ability to write a, how many 1,000-words story is this?
It’s about 5,000.
So it’s pretty rare these days. Not a lot of long form, there’s some more of it now, it’s a little bit in vogue. There was a vogue for it, less vogue now. When you go about constructing a story like this, you said you were working on it last summer of 2016?
The first conversations. Yeah.
So even before ... Walk me through how you create a Wired magazine cover story. So you’re having conversations about the story you might write last summer?
I don’t know how much I can go into this, mainly because I wasn’t present for a lot of it. Mainly this was a discussion ... I had a marvelous editor on this, Richard Dorment, and I think he was more the genesis of the story.
So he wants to do a story?
At some point contacts you and says, “I want you to write this story.”
I think he contacted the Times first.
So he goes to the Times first and says, “We want to commission this story about you,” at some point he tells you that he wants you to do it.
So this is the summer, last year?
And the Times lets you talk to A.G. Sulzberger, I think that was one of his first interviews. Gives you access to other people in the organization. Do they grant you that at the beginning? Do you have to earn those interviews through the course of the reporting?
No, it was definitely with the understanding that I was going to want to talk to a lot of people, and I think there was an initial list of people that I felt would be really vital to talk to and they said “Sure.”
So you submit a list to the comms team?
Yeah. Yeah. Just like, “I’d like to schedule interviews with these folks,” and we added to it. I think in the end, the last time I did a list I talked to about 40-something [people].
Are they at the Times being told that this is going to be a cover story, because you’ve got this beautiful photography, or they don’t buy into that either?
No. Those kinds of decision never get made early.
So that’s not part of the pitch?
Time would want to put A.G. Sulzberger on the cover of the magazine?
No. No. No. No. No, because these kinds of features take a long time to do, but the individual magazines tend to get made the month of.
It’s sort of like what’s available, what’s ready, and does it make sense, this magazine? Then what is on the cover is almost kind of their last decision. I have to say, I’m basing that on my work as an editor.
I was going to ask.
I was the writer in this one so my traditional writer’s role in this was I had no involvement in the discussions over whether ...
You just went and did your interviews. When you’re talking to the Times and they say you can talk to A.G. Sulzberger for this many minutes or this many hours, and here’s the location where it’s going to happen, do you get the sense that they are, because you’re writing this cover, doing your reporting over weeks and months, that they’re sort of checking up on you and getting a sense where the story is going? You’re talking to people who are not on your list, right? Presumably.
Yeah. Yeah. Yeah.
And some of that comes back to them, so did you feel like you were being graded or evaluated, and maybe if they don’t like the way it’s going you’re not going to get the A.G. Sulzberger interview, or is it more relaxed than that?
I guess so. There wasn’t any tension like that. I think you always kind of wonder when you have a project like this, “Why are they doing this? What are they looking for?” But I don’t think it’s helpful to have that conversation of, “What are you looking to get out of this?” So we didn’t talk, we absolutely didn’t talk in those terms. It was just very ...
Very chill, the New York Times. Frequently you get a, “What’s the story going to be? What’s the image? Are we going to be happy with this? I’m concerned about the tone you had in that interview.”
Yeah. No, there wasn’t any sort of, “If this goes well we’ll give you the next thing” at all. It was all very mellow. Yeah.
So this is something you start in the summer? 2016? It’s mid to late February now.
You’ve done a lot of work online. Were you thinking about that while you were working on this print piece? That this is something that’s taking you six months, and it’s one story, and when I work online we produce 1,000-word stories in a couple days or a week?
Yeah. Sure. One of the nice things about this opportunity was that I as a writer am not imagining the next time I’ll have this much bandwidth to put into a project like this.
Yeah. I guess with your editor hat, were you thinking this is substantially different than a piece I would have written if I was assigning it and said, “Give me this piece in two weeks or three weeks”?
Oh definitely. I would say long-form journalism is just such a different beast than internet journalism. You just have to know what you’re doing. You don’t want to do a slapdash project.
It depends on the outlet?
Yeah, and likewise, for example, a lot of magazines, I think their initial web strategy comes down to, “Let’s make magazine journalism, but faster!”
And then they just make a bunch of mediocre magazine stuff.
Let’s make dumber magazines.
Yeah. It was just a very different thing. Some of my favorite stuff is that I got to, it didn’t make the piece, I went in deep on the history of the Times. I think that was my writer’s procrastination, was to read more and more about the complete history of the New York Times, and I don’t think any of that ...
And was there ever any impulse to say, “Oh, you’ve got this cool stuff. It’s on the cutting room floor.” The magazine has X number of pages but we’re also going to go online. I read it online. Let’s annotate it. Let’s provide Gabe’s Greatest Hits that didn’t get in here.
No, we’ve not had a chat about that, but I’m open to it.
All right, well I’m not going to assign it to you. Gabriel Snyder, thank you for your time. Thanks for writing this piece. It’s a good piece. You should all go check it out. It’s probably available for free online?
You may not have to buy ...
I’m sure the folks at Condé Nast would be happy if you bought a subscription as well. I’d tell you to go support Gabriel Snyder’s new thing, but he won’t tell me what it is, so can’t help you there.
This article originally appeared on Recode.net.