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Feb. 22, 2019, 1:33 p.m.

The New York Times’ Mark Thompson on how he’d run a local newspaper: “Where can we stand and fight?”

“I believe that if you’re producing journalism of value, there is no reason to expect that consumers wouldn’t be prepared, in some way, to support that — potentially to pay for it. And that’s probably, ultimately, true of regional and local journalism as well as national and international journalism.”

What would New York Times CEO Mark Thompson do if he ran Gannett? How much does he attribute the Times’ accumulation of millions of digital subscribers to the journalism produced by its burgeoning newsroom? Does the Times have a role to play in helping local news recover?

In this edited Q&A — assembled from my interview with Thompson for this accompanying story — I asked Thompson about the wider takeaways others might take from the Times’ success.

Ken Doctor: Your numbers were really good — and this after the Trump Bump long ago ended. [Editor’s note: The Times reported strong growth in digital subscriptions and revenue in its final numbers for 2018.]

Mark Thompson: Into the end of 2016 and early 2017, we were growing with some significant rocket fuel from the political cycle and the Trump presidency. You know, the solid rocket boosters kind of fell away. They’d done their job. We’re trying now to get smart about the way we go about the physical product and the geometry of the pay model, where we have launched various new products and other ventures, like podcasting and now a TV show.

Doctor: While the newspaper industry has suffered through devastating staffing cuts, you’ve added a large number of journalists. What are you actually able to measure in terms of the connection of more and better content, more investigative content, and actual revenue?

Thompson: I think of it as one of those forms of investment — like brand marketing — where you’ve got to stop yourself from expecting or demanding too literal a straight-line attribution.

I would much rather think of it as a kind of broad line of credit, which Dean [Baquet, the Times’ executive editor] and his colleagues in the newsroom and James [Bennet, the Times’ editorial page editor] and the team in Opinion get to spend in interesting and creative ways. It says more about art than science in a way.

I think it’s pretty steady investment in our newsroom and, you know, really relevant high-quality journalism. I think it’s a very simple, old-fashioned model.

Doctor: But you do some tracking of what drives new subscriptions.

Thompson: We have some instincts. We think that original investigative stories which we own move the dial. There’s some evidence of that literally in a seismograph — you can see the rate of the subscriptions on a day-to-day basis. But overall it’s the indispensability of The New York Times, and The New York Times being the center of lots of conversations. I think that’s very good for the indispensability of the brand in many people’s lives.

There’s nothing in our data which is inconsistent with that. It’s quite hard to prove in detail. I mean, another example is we’ve seen an interesting shift: We have slightly more women users, female users now than men. It’s very close, but that’s after a long, long time of having more men. It’s quite difficult, to be sure, to attribute that directly to #MeToo, or to the arrival of a gender editor, Jessica Bennett, or to writing obits of women who’d been left out by the Times obits team over a century or more. But all those things, I believe, have broadened the appeal of The New York Times and made it more relevant to potential women users.

And so I wouldn’t say that we should be trying to micro-target journalistic investment precisely against digital engagement and conversion goals. Our experience has been putting faith in our newsroom and opinion leaders to hire interesting talent, to explore new areas. Something the Times has been very keen to do is improve its business coverage, and in particular, the superlative covering of Silicon Valley — they’ve broken a whole series of great stories from the valley which have been front-page news, headline news, and significantly away from the main political cycle.

I mean, one thing we’re all very keen to do is not get typecast to a single story, and I think that’s been going quite well — because there are so many other incredibly interesting, and in some ways troubling, things happening. It’s been an incredibly lively international news cycle, of course, as well. It’s very target-rich for journalism, and the strange experience we have is we are investing at a time when most other people are dis-investing.

Doctor: What about your competition?

Thompson: The competition is certainly there. The Washington Post and The Wall Street Journal are real competitors. There is a surprisingly uncrowded competitive market for a lot of the journalism we do.

Doctor: I remember you and I talked about this in the last long interview we did, maybe 18 months ago. I think we were talking about a “last man standing” theory.

[Editor’s note: Thompson in November 2017: “I think over the next five years, it’s possible the competitive landscape will actually get in some ways more attractive for The New York Times, because I’m afraid I see a lot of casualties over the next few years because of the economics of the industry. And, actually, I think for a period we could enjoy — well, we won’t be alone in this — but the survivors could enjoy a kind of last-men-and-women-standing sort of benefit for a bit. From our point of view, that could be a period where competition becomes less.”]

I was talking to a friend last week, and we were saying: On two hands, you can count the Times, the Post, the Journal — you can throw in CNN with all they’re doing — and on the magazine side, what’s working is The New Yorker and The Atlantic. And these are mostly legacy publications that have been kind of reborn and figured out the digital subscription machine. And those are the survivors. It’s very hard to find, especially as the BuzzFeeds fall back, much else at that level as we get into the next decade. It’s really incredible.

Thompson: It’d be interesting to see where the — Axios, as an example, where there is a new wave of journalistic style types who are kind out-of-the-box clever — more clever than the, as it were, first and second generation of “legacy digital” publishers, if we can call them that.

Doctor: You talked about an “old-fashioned model.”

Thompson: The consumer wants something that feels different and valuable. Whether there are more businesses to be built there, I certainly wouldn’t rule that out.

Doctor: We’re learning what doesn’t work.

Thompson: The model which basically put its faith in extraordinary distributed breadth of consumption — hundreds of millions of users. Where it’s about a very thin layer of monetization through different kinds of digital advertising, and scant regard for whether the consumption of the product was happening on your own assets or happening on some other platform, like Facebook or Twitter or whatever. I think that whole model looks very suspect, and I have to say, I think it always did, really.

I think there were good reasons to believe the benefits of advertising typically accrue at the platform level. They used to accrue to newspapers, where newspapers — because they control printing and distribution — were essentially platforms, with near monopolistic reach and therefore colossal pricing power. Once you take those advantages away, the model collapses, and instead it’s the major digital platforms who have the same kind of quasi-monopolistic advantages of distribution.

Doctor: You’re absolutely right. I mean that, and you can see it. But you also had to know who you were, and you had to find a way to maintain your investment — which you’ve done and a handful of others. The major vacuum now is local news, across not just the U.S. and Canada and the UK — it’s everywhere in the western world.

I told several friends yesterday you and I would be talking, and universally, one of the questions they had was: Is there anything that the Times sees in its future for what it can do on regional news, metro news in a bigger way than it’s doing now?’

Thompson: I think I would say that one thing that unites both sides of the house of the Times is shared concern on this topic. Dean Baquet, [managing editor] Joe Kahn, James [Bennet], Meredith [Kopit Levien, the Times’ chief operating officer], and I all talk about this — we sort of stand ready to help if we can. I mean, we would love to help support a successful broad ecology for journalism in the U.S. and the rest of the world.

I think, firstly, I’m definitely an optimist on the level of consumer demand for quality content. In other words, I believe that if you’re producing journalism of value, there is no reason to expect that consumers wouldn’t be prepared, in some way, to support that — potentially to pay for it. And that’s probably, ultimately, true of regional and local journalism as well as national and international journalism.

However, obviously there are scaling issues, and issues about how do you get effective technology and marketing skills and mechanisms in the hand of small outlets, so they can execute against that kind of plan. But there was once an enormous paid market for journalism in America. I mean, of course advertising was critical, but an awful lot of people were paying money for journalism. I always say: We’re not trying to invent a new willingness to pay. We’re trying to recapture, in some way, the willingness to pay.

Doctor: I know your hearts are there, and I’ve talked to Dean about it at some length. But is the Times involved? There’s a whole bunch of people talking about multimillions of dollars that could be invested in local journalism. Is the Times involved in any of these efforts to restart high-quality local journalism?

Thompson: We’ve been involved and are involved in conversations. It’s fair to say I don’t believe to date that we have, on either side of the house, committed to any one specific project. I think it’s currently conceived of. It is a hard problem.

Doctor: One related question: If Mark Thompson, with your experience — now, especially, after all the years of what you’ve done at the Times — were to take over a company like Gannett or Tribune, how would you answer someone who said: “Mark, what should we really do?”

Thompson: Thanks for the incredibly easy question.

Doctor: It’s an important one.

Thompson: My instinct coming into the Times, and it would be coming into any other organization, is: Where can we stand and fight?

You know — where is the place, where is the audience, where is the city where we can start trying a different approach? An approach based on trusting the audience, trusting in the journalists, and trying to build something — which then builds the audience, which then builds revenue. Rather than constant retreat everywhere. So I’d be looking for: Is there any way, in this landscape, that we can find somewhere to stand and fight?

I have to say, though, for me a pretty formative experience in late 2012 and through 2013 was going through this exercise with The Boston Globe, which the Times owned at that point. And the thinking at the top of the company when I arrived was that the Times should sell The Boston Globe, and that it was going to be fantastically difficult to manage the Globe in a way where it wasn’t going to become over time a net depleter of the total business, rather than something that was going to add to the success of the company.

And I think, for a long time, I was quite skeptically saying: That can’t be right, because if it’s right about The Boston Globe, it’s probably right in every other metro, and you’re essentially condemning an entire gigantic part of American journalism to decline and ultimate dissolution. And I tried very hard to figure out an alternative. But in the end, we did need to sell the Globe.

So it has a good owner, John Henry. When I’m in New England, I sometimes see The Boston Globe — I still enjoy reading it. It’s still a good, growing concern with an owner who cares about it.

But it was a very telling point with me. My instinct is, where you can, find a spot where you think you can defend something — and build from that point. And I think it’s hard with the metros and hard with the smaller publications to see a way of doing that.

Doctor: Let’s move over to your great numbers. Your model looks like a fairly well-humming machine, at least from the outside.

Thompson: From the outside, yes.

Doctor: You’re getting basically two-thirds reader revenue, one-third the rest. If you look at regional dailies, it’s basically the opposite, especially with print advertising being as challenging as it everywhere. It’s fairly impossible with a two-thirds ad, one-third reader revenue split to make it through. Isn’t that core to what you’ve done here?

Thompson: I think there’s something we’ve discovered. There’s a very big discourse in media which sees a fundamental tradeoff between the kind of things you do to build a good advertising business and a good subscription business. You know, “you need reach for advertising, you need depth for subscription.” Digital advertising can really interrupt the user’s experience; there’s a whole set of arguments about why you have to make some sort of choice about which you’re going to lead with.

I want to say that, the way things have turned out certainly at the moment, I believe our digital subscription business is helping us to develop a superior, differentiated digital ad experience. And because of the quality of the content and the quality of the product, it’s produced a relative exclusiveness. We are more attractive to the world’s leading brands than we would be if we didn’t have a digital subscription business. That’s why we’re growing our digital advertising business.

Photo of Mark Thompson by NYT/Jake Chessum.

POSTED     Feb. 22, 2019, 1:33 p.m.
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