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So Youngstown will have a daily named The Vindicator after all. But it’s a brand surviving, not a newspaper.
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July 31, 2019, 12:04 p.m.

The L.A. Times’ disappointing digital numbers show the game’s not just about drawing in subscribers — it’s about keeping them

We will all benefit if the Los Angeles Times becomes a West Coast counterweight to those dailies in New York and D.C. But it’ll take a bigger investment in reader retention to get there.

When Patrick Soon-Shiong bought the Los Angeles Times out of its tronckian purgatory last year, it was an occasion to consider where it sat on the increasingly barbell-shaped spectrum of American newspapers.

You see, other than the two nationals aimed at niche audiences — The Wall Street Journal for business types, USA Today for people staying at the Days Inn by the airport — pretty much all American newspapers used to be recognizably in the same business. Take a look, for instance, at print circulation numbers for an assortment of big dailies in 2002, before the web hath wrought what it wrought:

Newspaper 2002 print circ
The New York Times 1,113,000
Los Angeles Times 965,633
The Washington Post 746,724
New York Daily News 715,070
Chicago Tribune 613,429
Newsday 578,809
Houston Chronicle 552,052
The Dallas Morning News 521,956
San Francisco Chronicle 512,129

You can see The New York Times at No. 1 and The Washington Post at No. 3 — but the L.A. Times slots solidly in between them. Closer to the top spot than to the Post, actually. And the other metro papers have circulation levels vaguely commensurate with the size of their cities and markets — smaller than the coastal giants, sure, but still big.

Now look at the same table, but with a new column added: how many digital subscriptions each newspaper has today.1

Newspaper 2002 print circ 2019 digital subs
The New York Times 1,113,000 2.7 million
Los Angeles Times 965,633 170,000
The Washington Post 746,724 1.7 million
New York Daily News 715,070 27,000
Chicago Tribune 613,429 100,000
Newsday 578,809 25,000
Houston Chronicle 552,052 37,000
The Dallas Morning News 521,956 72,000
San Francisco Chronicle 512,129 57,000

Pretty different, right?

This is, fundamentally, the problem facing local and regional dailies. There is a business to be had selling digital subscriptions to newspapers. But it’s a business dominated by two papers on the East Coast. (Again, I’m excluding the Journal for my purposes here, but they’d make three.) Papers that used to have competitive scale in print — where the limitations of physical distribution gave them market power — just aren’t able to play on the same field as the big boys in digital. That’s the barbell shape: a couple heavyweights on one end of the spectrum, a lot of small fry on the other, no one in between.

That’s what makes the L.A. Times such an interesting and important case. It used to literally be in between those two I-95 papers, after all, and with Soon-Shiong’s limitless capital, it could make a vigorous effort to squeeze itself into that other duopoly. If the L.A. Times could do it — with resources, ambition, a ton of smart hires, and its California competition on its heels — maybe it could then inform the strategies of the industry’s next tier down. Will the L.A. Times be the nation’s biggest metro paper or its smallest, scrappiest national one?

All of that is what makes this news, first reported last night by Poynter, is so depressing:

Digital subscriptions at the Los Angeles Times are way below expectations, and leadership, in a memo to staff, said the future of the paper could depend on solving the issue rapidly.

Whether due to unrealistic expectations or editorial and business failures, the Times is nowhere close to meeting its digital subscription goal. The Times had hoped to double its digital subscriptions from just more than 150,000 to 300,000 this year — a number that would have to be doubled again, the memo said, to come close to covering editorial costs. But midway through the year, the Times is nowhere near that number, having netted only 13,000 digital subscriptions in 2019.

In a memo sent to staff on Monday afternoon and obtained by Poynter, Executive Editor Norman Pearlstine and Managing Editor Scott Kraft wrote, “Our future depends on rapid and substantial subscription revenue growth.” They added, “Performance for the first half of the year … has been disappointing.”

The memo said that the Times added 52,000 digital subscriptions, but “significant cancellations during the same stretch” left the Times with a net increase of only 13,000. (A current online offer is 99 cents for the first month and $2 per week after that, or about $100 a year.)

Yeesh — that is unfortunate.

In its defense: The L.A. Times launched into this new era with a lot of technical debt (clunky systems inherited from and still intertwined with Tronc) that it’s still working to pay off. And the entire operation had been beaten down as much as any over the past dozen years. Just listing the litany of horrors makes me sad: the Sam Zell/Randy Michaels era, the four-year bankruptcy, Michael Ferro, layoffs, Ross Levinsohn, the D’Vorkin interregnum, an escorted-out editor, did I mention Michael Ferro, and that video.

But from that low point, the Times has invested in the newsroom and done an awful number of things right, so to see this sort of subscription result is really disappointing. It’s also a reminder that getting digital subscriptions right isn’t just about getting people in the door — it’s about keeping them there.

The mainstream American newspaper paywall — which dates to 2011, when The New York Times put up its metered version — has gone through a series of evolutions. Pricing, which started high in some markets, has mostly settled at about $10 a month or $100 a year. The number of stories free to non-subscribers has dropped — from 20 at the Times’ launch in 2011 to 10 to 5, even as low as 2 (or 0!) in some markets.

But once you get all those subscribers signed up, you’ve got to prove yourself worthy of their money, over and over again. Churn has always been an issue for newspapers, but it’s even more of one in a world of constant competition for subscription dollars. (“Hmm, Netflix raised their price — do I really use that L.A. Times subscription?”) Retention is critical to making reader revenue the bedrock of the new business model; one newspaper found that half of its new subscribers left within three months — but that after that point, the departure rate dropped under 2 percent a month. You’ve got to get around that corner.

So what gets you there?

  • It’s frequent messaging that reminds readers of the value of their subscription — both the practical value and the values that buttress the case for supporting local media.
  • It’s building out unique subscriber-only experiences that make them feel they’ve got an inside pass to something important.
  • It’s not just creating great journalism — it’s making sure that the great journalism gets seen by the people who’d enjoy or derive value from it.
  • It’s using customer data to determine what, exactly, an individual reader finds valuable about what you produce and making sure they come into contact with it as often as possible.
  • It’s constructing tools that increase the frequency of a reader’s contact with the paper — email newsletters, weekly podcasts, smart news alerts, the right pushes for weekend content, and anything else that builds habit, the most important predictor of subscription propensity.

I’m not saying people at the Los Angeles Times don’t know all of this; of course they do, and they’re investing resources into it. Maybe the infrastructure is nearly built and a turnaround is near. But signing up 52,000 new subscribers — while losing 39,000 existing ones over the same span — strongly suggests that there’s more work to do there.

Let me also speak from experience here. I bought a digital subscription to the L.A. Times on March 20 — both to see what sort of work they’re doing and to support the idea of another big ambitious newspaper newsroom in America.

I just searched through my email: I have not received a single email from the Times in those months since promoting a breaking story, a feature, a benefit, or a reason I should be happy to be a subscriber. No email from the editor telling me about the great work they’re doing and how my subscription dollars made it all possible. Not one.

Instead, I get one email every morning from the Times with a picture of the front page and the same subject line every day: “Your eNewspaper has arrived.” That’s it. (I don’t even remember signing up for it — I’m not an “eNewspaper” kind of guy. But maybe I did.)

I’m sure the Times has published a bazillion stories I’d love to read in the past four-plus months. But I find the ones I do read the same way I did before — seeing a link on Twitter.

If I was a borderline L.A. Times subscriber, it would be very easy for me to see my subscription as disposable right now. I haven’t been told or shown why it’s useful to me. And apparently, I’m not alone.

(Allow me one other selfish sidenote: Patrick Soon-Shiong has said that his eventual goal for the L.A. Times is to have 5 million digital subscribers. A target that outsized shows the ambition he brings to the project — but as big as metro L.A. is, there are not going to be 5 million digital subscribers there. There are not going to be 5 million digital subscribers in all of California. If those ambitious goals are ever going to be reached, they’ll have to convince a lot of people far from El Segundo — nationwide, worldwide — it’s worth paying for. That’s a lot of people who currently have very little attachment to or even experience with the L.A. Times. Building useful editorial points of entry for people who love great reporting and are interested in California but don’t live there should be near the top of the to-do list.)

If the L.A. Times wants to be in the same conversation as those East Coast guys, they might want to look at what their peers are doing when it comes to retention. The New York Times has an entire team dedicated to it; 10 people are dedicated just to new subscribers’ first 90 days. Here’s a bit from an interview last year with the retention team’s then-head, Ben Cotton:

We are in charge of everything that happens to a New York Times reader after he or she becomes a subscriber. We have another team in Consumer Revenue focused on acquisition that’s trying to get people who are readers to read more and eventually convert to become a subscriber. The moment they do, my team takes over.

We are responsible for everything from the first onboarding email you get right after you become a subscriber telling you about the Times and what you get with a Times subscription, through the times that you’re contacting us by phone or chat or email for customer service reasons, all the way up to the point that you decide to cancel, although we hope that you obviously decide not to cancel.

Between all of that, we are responsible for retention and engagement marketing — so doing marketing to our customer base to try to make sure that they’re seeing all the best things that the Times has to offer, and making sure we manage subscribers through important lifecycle moments in their journey as a subscriber. We have people who work on subscriber-only benefits to try to reinforce the value of a subscription and make clear to subscribers why what they’re paying for is worth more than the free product.

Then it’s subscriber-only content like the Year of Living Better guides that we’ve been doing. Then [we have] customer care — our whole customer service operations that answers the phones or responds to emails from subscribers who either have questions about our products or subscription offerings or who have complaints or concerns about anything we’re doing that they don’t like.

Again, just from my own experience, I get messaging all the time from The New York Times about subscriber benefits, exclusive content, events, chances to talk with reporters, stories I missed that I might enjoy, and so on. That’s the sort of work that has let the East Coast Times keep churn rates low and enabled the unending string of strong digital sub numbers they put out every quarter. Here’s Raju Narisetti, a veteran of The Washington Post and The Wall Street Journal, among others:

One last excerpt from that Ben Cotton interview:

The other thing I’d add is that we’re experimenting all the time. A lot of these things we’re doing for the very first time…so we’re going to see how it works and we’re looking closely at the data we get from it. The cases where we see success we’ll probably do more like it, and the cases we don’t, we’ll move on and try other things…

I think that’s been the theme of this kind of work: that it’s been deeply collaborative and cross-functional, and that in many cases, they’re editorial-led ideas. Because we as a company have decided that we’re going to make subscriptions the focus of our business strategy, writers in the newsroom and editors and product managers and designers are always thinking about what we could be doing for our subscribers on a much more regular basis than they were before.

Here’s to more experimenting, more data evaluation, and more cross-functional collaboration. And most importantly, here’s to the L.A. Times — I hope they figure it out. We’ll all be better off if they do.

  1. Some obligatory notes: The Washington Post reports digital subscription numbers as often as Amazon reports Kindle sales, which is to say only whenever it’s convenient for them — so that 1.7 million is my estimate. Other numbers are gathered from quarterly earnings reports and filings with the Alliance for Audited Media. Those AAM numbers are subject to lots of definitional hedging — counting how many digital subscribers you have is apparently a very hard thing to do! — but I tried to be as generous as possible in interpreting the numbers as possible. It’s likely some may include double-counted subscribers. []
POSTED     July 31, 2019, 12:04 p.m.
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