July 30, 2020

 

Dear Ms. Levien,

Congratulations on your new position as CEO of The New York Times Company! We’ve never met, but I’ve only heard great things about you and I’m excited to see what you have planned.

As bizarre as it may sound, it’s possible that you’re entering the job in the most comfortable situation of any Times CEO since Arthur Ochs Sulzberger added the title in 1973. When Russell T. Lewis took over in 1997, the print money was still flowing nicely, but the challenge and/or opportunity of “the On-Line Era” was already front of mind for some. By the time Janet Robinson took the helm in 2004, advertising revenues had already been dropping for four years and the shift of dollars to digital was already underway. And when Mark Thompson got the job in 2012, Times stock was trading 80 percent below what it had fetched a decade earlier.

But thanks to some smart strategy, great journalism, and Donald John Trump, The New York Times in 2020 is stronger than ever. Its newsroom is bigger than it’s ever been. It has more subscribers than it’s ever had. Its stock price is in shouting distance of a new all-time high. It’s expanding into other forms of media from a position of strength, not fear or wary obligation. It’s flexing its muscles at Silicon Valley. It’s even making buzzy acquisitions, and it has hundreds of millions in cash lying around if it wants to make any more.

In other words, you have lots of options ahead of you. Can we be the ones to figure out paid audio? How much can we expand into TV and movies? Should we keep trying to unlock major growth from new languages and international expansion? Is advertising cratering quickly enough to rethink our future plans for print? Should our 1,700-journalist newsroom keep growing — and if so, into what areas and with what skills? And you should be able to address all of these questions with a longer-term view than your recent predecessors often could, occupied as they were with selling off assets, managing buyouts, or trying to return to growth.

But let me suggest one other strategic item that I hope you’ll put very high up on your agenda. The New York Times has to do more to help save local news in the United States.

The relative sense of calm and stability at the Times is held at approximately zero local newspapers. Even the smart ones, with relatively successful digital subscription models and locally engaged ownership — Boston, Minneapolis, Charleston — don’t have the Times’ confidence that future ad declines can be managed without a loss to the journalism and to the product.

The papers that are independently owned often don’t have the resources to build the digital infrastructure — analyzing audience behavior, optimizing subscription strategy, building complex interactives — that are table stakes for many of the big national and international news brands. And the papers owned by chains are increasingly chum for hedge funds more interested in marrow-sucking than business-building.

I doubt there’s anyone at Times HQ who disagrees with the scale of the problem. Your executive editor, Dean Baquet, said last year: “I think most local newspapers in America are going to die in the next five years, except for the ones that have been bought by a local billionaire.” Mark Thompson was talking about the U.K. media when he said: “At the regional and local level, it looks like something close to a wipeout without dramatic intervention.” But I doubt he thinks American dailies and weeklies stand on significantly sounder ground.

When our Ken Doctor interviewed Thompson last year, he asked about a potential Times role in aiding local news. Thompson said “shared concern on this topic” united both the business and editorial side of the company. But he didn’t seem to have anything concrete in mind.

Thompson: …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.

And just a few days ago, when Jessica Lessin of The Information asked you a similar question, the answer was similarly nonspecific.

Lessin: How does the Times plan to support local journalism?

Levien: The structural pressure on local journalism and the demise is devastating, and it is important to the Times. Our own talent is fed by an ecosystem of local organizations and vice versa, and we get and give a lot of talent for that local system. There is extraordinary reporting out of the local news organizations. We are still working through the best way to help. We are making a market for paid subscription journalism and working alongside local reporters. I expect to go beyond that, but I do not have a full answer.

It is a hard problem! And when the Times’ own future was uncertain — when people were writing underinformed pieces predicting its imminent demise in a matter of weeks — it certainly made sense to tend to your own affairs.

I don’t want to imply that the Times’ success is forever guaranteed, that you could just put the place on autopilot and keep getting a few hundred thousand new subs every quarter. But the Times’ corporate crisis is over. For almost everyone in local newspapers, it’s a very active concern.

So what would it look like for the Times to truly focus on improving the state of local news? I’m sure there are plenty of good ideas in the minds of Timesfolk. But here are a few potential areas of exploration.

— Shared data. Most local news publishers have terrible data about their online audiences, which makes ad targeting at any level beyond “people interested in news about this city” difficult. The Times has invested a lot of time and resources into developing a robust set of first-party data that will let advertisers target any of 45 distinct audience segments, and those slices are only going to get thinner and more numerous.

Could you find a way to extend that data umbrella to high-quality local news organizations? In theory, that could increase both the quality of your targeting data (by connecting it with local behavior) and provide an assist to publishers whose work you consider valuable — and who, if we’re being honest, are more like your compatriots than your competitors.

— Shared ad inventory. When it comes to local advertising, local outlets do their own thing. But when it comes to national ads, they’re often left auctioning off excess inventory to remnant ad networks that offer neither a great experience for users or lots of money for publishers. Would Times national advertisers sometimes be interested in accessing a much larger market of quality newspaper readers? The average reader of The Dallas Morning News, the Miami Herald, or The Seattle Times is attractive to advertisers in many of the same ways a Times reader is.

— Shared subscriptions. Digital subscriptions are proving to be a winner-take-all kind of business. About half of all digital news subs in the United States go to either you guys or The Washington Post. The New York Times has more digital subscribers than all local American newspapers combined. The Post used to be interested in tying together local and national subs, offering free access to washingtonpost.com as an extra benefit to people who subscribed to their local daily. Their strategy shifted, but there has to be a way to connect the two geographies at which people tend to consume news.

— Shared tech stack. This is the direction the Post’s strategy shifted toward: Arc Publishing has turned much of the Post’s backend technology into a SaaS product that covers content management, video streaming, A/B testing, subscription processing, ad tech, and more. It’s grown into a nice business for the Post. Maybe you guys are just fine with the Post extending its tendrils into the world’s publishing infrastructure — but hey, aren’t you supposed to be rivals or something? It’s not too hard to imagine Arc becoming the basis for a more thoroughly monetized network, with Jeff Bezos’ Post at the head.

— Shared content. This is tricky, of course, since the river of Times content is the core asset that makes the rest of the business work. And local news outlets want to defend their geographic fiefdoms, which are in many cases their strongest argument for existence.

But how can you make the experience of being a subscriber to the local daily better if you’re also a New York Times subscriber — and vice versa? Could publishers who promote Times stories on their platforms get some sort of credit — a cut of ad revenue, or of a portion of the subscription revenue pool — for directing their readers’ attention your way? Would The Morning have a higher open rate if it also included some top stories from a Times partner in a reader’s city or state? An earlier iteration of the Times had paid content deals with regional nonprofit news outlets in Texas, California, and Chicago. That effort fell victim to budget cuts and too much emphasis on print, but 2020 is a very different world.

It’s increasingly clear that most people, if they’re willing to pay for digital news at all, are only willing to pay for one subscription. That’s been great for the Times, since it is by a wide margin the most likely to win that single spot. But can you find a way to share some of that value with the beleaguered souls reporting local news?

I know there are reasonable objections to all of these ideas. (I can think of a few, and I know a tiny fraction of what you do on most of these fronts — so I’m sure you can think of many more.) The history of cross-publisher collaborations is not the strongest; media companies like to squabble amongst themselves, and many partnerships have been reduced to side projects that executives find easy to starve of resources and attention. The technology challenges are daunting; connecting data systems built on dozens of different platforms is a giant pain.

But the main thing I’m asking here is for The New York Times to actively think of increasing the health of local news as a core part of its mission.

There will, no doubt, be other lines of Times business that can offer a higher return on investment. I doubt helping The Montgomery Advertiser or The Kansas City Star will ever move revenues as much as producing a few more shows for Netflix. But a willingness to sometimes put civic health above P&L is what strong family ownership is supposed to provide. It’s what separates the Sulzbergers from the Alden Global Capitals. The Times has a long history of accepting less-than-maximum profit in order to support the quality of its journalism. Now it has the opportunity to do the same for the quality of local journalism.

The New York Times Company spent much of this century paring itself down to its core product. It sold its regional newspapers, its digital companies, its TV stations, its classical radio station, its share of the Red Sox — just about anything that wasn’t the “New York Times” part of The New York Times Company. It did that because the core Times was a more important asset to maintain — and protect — than an ABC affiliate in Scranton.

That unique position in American news has allowed the Times to remain relatively inward-focused, tending to its own sustainability and growth instead of seeking alliances or spreading its success. That, more than any specific subscription offer, is what I’m hoping you can help change.

It’s Janet Robinson who gets the most credit with transforming the Times from a local paper into a national one in the 1990s — a critical shift that set the stage for future success, and one it took the Post much longer to figure out.

And it’s Mark Thompson who’ll get most of the credit for the Times’ dedication to being a subscription-first business and the enormous growth in digital subscriptions that it catalyzed — even though you obviously played a huge role in that yourself. (The Times had a total 509,000 digital subscriptions when Thompson was named CEO. It added 587,000 new digital subscriptions in the first quarter of 2020 alone.)

Crediting a CEO for that sort of major corporate achievement is always a bit of a fudge, of course; it obviously takes the work of hundreds or thousands to pull off something significant. But nonetheless, on the day you leave the Times, whatever the circumstances, media writers like me will try to sum up what you accomplished in one of the world’s most important jobs in journalism. Wouldn’t it be great if we could say you helped save high-quality local news in America?

Best,
Josh