Inside The New York Times Business Model: How Bundling Saved Journalism
While many of the world's largest news organizations struggle financially, the New York Times' stock is up more than 175% from its 2022 low. Today's newsletter explains why.
It’s no secret that journalism is a tough business. The LA Times has gutted its newsroom, Vice filed for bankruptcy, and with $100 million in annual losses, the Washington Post recently eliminated its sports department by firing more than 300 employees, representing approximately one-third of its total workforce.
But while virtually every news outlet struggles with a broken business model, the New York Times appears to be thriving. With 12.78 million total subscribers, $2.8 billion in annual revenue, $550 million in free cash flow, and a $12 billion market cap, the NYT has become an anomaly in an industry that is otherwise in free fall.
Media insiders will tell you that the New York Times was able to do this because it is no longer a news company. Games such as Wordle, Connections, and the Mini Crossword now account for more than 50% of time spent inside the NYT app. When you combine that attention with valuable add-ons like cooking recipes and Wirecutter, the NYT has essentially turned its newsroom into an auxiliary business, forcing customers to buy bundled subscriptions with better economics.
Just look at the chart below — the NYT now has only 1.5 million news-only subscribers, compared to 10.8 million on a bundle or other single-product plans.
Diversifying your revenue is great, but that’s not the real story here. The real story is that the New York Times has put together a playbook that every major media brand is now trying to copy in order to survive in an increasingly uncertain world.
So for today’s newsletter, we’re going to dive into the details. Rather than taking the easy way out by claiming that the proliferation of cheap content via artificial intelligence will destroy every major media organization, I’m going to walk you through the exact playbook that the New York Times used to turn its business around, going from $100 million in annual losses to a $12.5 billion market cap.
I didn’t intend to write 2,000+ words on this topic, but I got carried away and wanted to be as comprehensive as possible. My hope is that this breakdown can serve as a case study for a wide range of people, including retail and institutional investors, media professionals, and anyone interested in subscription economics.