Okay, great. We'll get started. We are happy to have back at the conference Meredith Kopit Levien from The New York Times, President and CEO. Meredith, thanks for being here.
Happy to be here.
Great. We'll start with this. Since early 2022, when you purchased The Athletic, you have referred to The New York Times as the essential subscription product for someone wanting to understand and engage with the world. Maybe using that as a framework, give us a big picture view of your strategy and growth plans.
Yeah. Thank you so much for having me. That's a good question to start with. We are absolutely still aiming to be the essential subscription, and I think we are making real progress on each of the sort of three pillars that underpin that idea. We are advancing our lead as the world's best news destination. We have built and are continuing to grow leading lifestyle products in really big spaces where people spend a lot of time and energy. We have put those two ideas together in a multi-product bundle that makes it easy and accessible for people to come to the whole of what The Times offers and ultimately take part in the whole of what The Times offers. I'll say just a couple of things about sort of how we grow from here.
I think things have gone very well up until this point, and we really see running room in every direction. We have very deliberately chosen the spaces that we're in, news and each of the lifestyle spaces, for being really big places where people spend a lot of their time. That makes us really relevant to both consumers and to marketers. Our focus now is on making sure we continue to add value into each part of our product portfolio. We'll do that by continuing to cover the most important stories in the world. In each part of the portfolio, we are focused now on making that work more accessible to people in more formats, so more video, more audio. I hope we talk about that. We are also focused on rolling out new value into each part of the portfolio.
We did a lot of that last year. We'll continue to do that. This year, we have a really robust roadmap in each product. All of that is helping us continue to grow the engaged audience for The New York Times. All of that makes us confident that we can continue to build a larger and more profitable and more impactful New York Times Company.
Okay. On earnings calls, forums like this, you've always noted the importance of engagement. Maybe you can just kind of level set where you are right now, both for subscribers and non-subscribers, and what is The Times focused on in 2025 to move this higher?
Yeah. Let me start kind of at a high level, and then I'll talk about subscribers and non-subscribers. At a high level, we have a really big audience for everything we're doing now. 50-100 million people come every week to The New York Times in one way or another. A third of all American adults come. We've got, I think, in the order of 150 million registered users and counting. We have millions of people who come to us directly and multiple times a week. Those are two things we're very focused on growing. I want to say people don't just come. They're like active users when they come.
My favorite stat that I heard in the last couple of weeks is that every minute of the day, 2,000 people are sharing their Wordle score, so like 4,000 shares since I got up here, including maybe the Pope. I don't know if he shares, but I know the new Pope plays. Really, really big audience and a lot of cultural resonance across the whole of the portfolio. You ask about subs and non-subs. We have always been focused on subscriber engagement because obviously that is what drives healthy retention and the ability for people to feel comfortable paying more over time. We'll continue to focus on that. I think now, as importantly, we're very focused on building prospect engagement and really building the engaged prospect pool. This matters particularly as the sort of information ecosystem continues to change.
I think we are uniquely well-positioned to build that prospect pool, which means getting more people to have a direct relationship with us, to ask for us by name, to form a habit with our products. When they do that, sort of whatever happens to the information ecosystem, we are in a position to call them to action, to ultimately ask them to subscribe, to make them a valuable target for an advertiser and so forth.
I can't help but think that your comments on the Pope remind me that Wordle has a celebrity function now where.
We actually launched a friends tab in the Games app. One of the promotions with launch was you could play with celebrity friends if you were among the first people to do it. We have not yet gotten the Pope to be a spokesperson.
Got it. Then.
It's on the list.
On the list. Just real quick, a follow-up. Subs versus non-subs. Are your non-subs still primarily engaging on the web-based interface?
That's a great question. They're engaging everywhere. To be clear, I am talking about people coming directly, people coming to The Times, so coming to our websites, coming to our apps. They're engaging everywhere. We love app engagement for subscribers, but they're engaging everywhere.
Got it. Okay. I wanted to see if you could expand a little bit on the opportunity with video and audio on the app or elsewhere.
Yeah.
Actually, let's just start with that, and then I can do a follow-up.
Yeah. You know, at the highest level, why are we so focused on video and audio? It makes everything we do more accessible, makes it more engaging. I would say in sort of each of those areas, we've got a lot happening that's worth talking about. In video, you'll just see if you use the app or you go to the website, you're going to see far more embedded video than you saw before. Just as part of the report this morning, the coverage of the Menendez, I guess trial or retrial, was in video. The thing we're probably doing the most in video, where we've scaled the fastest, is reporter video. So a reporter giving you like a teaser for a big story they've just done, which does two things. It gets more people interested in the story in short form.
It also goes a long way to build trust because it says, "Here's what I did to get this story." It shows the work a bit, which is great. In audio, we obviously now you can listen to the majority, substantial majority of the times in an automated voice. We added a listen tab to the app. I think we said at earnings that we saw audio and video engagement both double in the first quarter. It is really, really working. I would say across the portfolio, we'll get into the other products. You're seeing us just be in more modalities.
Is video something that your journalists are kind of wholesale enjoying, right? I mean, I imagine this is an opportunity to kind of differentiate themselves.
I think it is. Look, what's the most differentiating thing about The New York Times news report? And in sports and in Wirecutter shopping advice, we have these giant newsrooms of professionals, of experts who have domain expertise in their beat. We were just talking about the Knicks beat reporter earlier. And to be able to have them kind of present themselves to an audience that is fundamentally good for them, it's trust-building. It really is just bringing new people, younger people, more people into the report. It is sort of virtuous in all ways. It is also, unlike the sort of pivot to video many years ago that a lot of media companies pursued, it does not take a lot of production to put a reporter on camera and just talk about the story they have done. It is relatively scalable.
Okay. I think recently I've heard you talk a little bit more about The Times' presence on social apps, Instagram, TikTok.
Yeah.
I think historically you've kind of more been focused on driving attention to your own platform. Is there any kind of shift in strategy here?
Yeah. No, I would say sort of how we think about what we do on our own platform, and make no mistake, we are scaling video and audio on our own platform. How we think about what we do out in the ecosystem is consistent with the way we've thought about it for years. Strategically, we want and need to be in places like TikTok and Instagram and YouTube because we're building brand equity. We're building an understanding of who we are and what we do with new audiences. By the way, we have research that says if you watch our videos on Instagram, you are more likely to come to The New York Times. You are more likely to have high sentiment of The New York Times. That is working. The work is we calibrate that with. And then what do you get when you come to our platform?
How do we make sure when you come to The Times, what you're getting is an even deeper, even richer experience? I have a lot of confidence that in the decade plus I've been at The Times, we're pretty good at figuring out that calibration and also clear that we want people to come to our destination. We exist in an ecosystem, and we have to be there to present our work.
Got it.
I think it's a big opportunity for us.
There's been a substantial redesign of the core app in the past year.
Yeah.
Curious of the learnings coming out of that. How much uptake have you seen for some of the personalization features, like the You t ab at the bottom?
Yeah. I'll just say two big redesigns last year. We redesigned the Games app and the core app. We are very happy with both of them. I'll talk about the core app because that's what you're asking me about. The point of the redesign of the core app, of course, was to drive more engagement and drive it in different ways. We really like what we see so far. If you are on the app now, I would say look at the top of the app, scroll to the left, and what you get is a very easy gateway to each of our standalone products sort of by brand. If you scroll to the right, what you get is the chance to see much more of the news report, culture and lifestyle and, depending on what's happening in the moment, great reads or wellness coverage.
I will say that really solved a problem of sort of surface area to get content to people. We're very happy with that. Two more things that are different in the app, one of which you're pointing to. There's like a new modalities tab, so you can listen. Now there's a listen tab in the app. I'd say we're just at the beginning on new modalities. Then there's a You tab where you can have an entirely personalized experience from The New York Times. We're early in all of that. We really like what we see so far. I would just say more to come.
Got it. Maybe separate to the core Times, I am happy to touch upon this a little bit, but there's been substantial innovation at Games, Cooking, Athletic. Probably separate each of these into its own question. For time, maybe we'll just ask it all at once. What's resonated?
Yeah.
Yeah.
Yeah. Let me say the big idea for all of them is we want to build category leadership and the largest possible engaged audience we can have, period. That is what we are trying to do. What we are seeing so far, and we really like this, is all of those products are now serving as on-ramps to subscription to The New York Times, either because you come and subscribe directly to Cooking or The Athletic or Games, or increasingly you buy the Bundle. That is really working. I'd say we're still early in that. Two, all of those products are now really helping us drive incremental advertising, which we're incredibly excited about. In Games, more features that unlock things like communal play. Of course, robust pipeline for testing new games.
In Cooking, we've long been focused on more recipes that are easy to make and easy to find. Now we're increasingly focused on easy to watch. I would just say more franchise video programming, which people love. In The Athletic, two things. Sports is visual, so we're building a more visual experience. We have NBA highlights in the app now. I was thinking on my way in here, probably more Knicks fans than Celtics fans. People probably came in, but I don't know. I'm not getting any reaction from the room. Watch the Knicks fans.
We did do this conference in Boston for recently.
I know. It's dangerous. Sorry. Watch the highlights. Go look at the highlights. What you're getting is not just highlights, but a combination of the expert journalism with the highlight. We're just at the beginning of that. Of course, on The Athletic, making it easier to follow the team that you most care about, team or teams.
When we speak on engagement, it's hard to separate out the news cycle, which feels quite elevated at the moment, maybe in contrast to what some investors had feared when we cycled past the election. I'm curious, Meredith, how much do cycles matter to The Times? Is it something that you obviously can't plan on it, but do you count on it, right, when you think about kind of hitting that 15 million sub-target?
I appreciate the question. I appreciate why a lot of people ask us this. I'm going to give an answer that I always give, and it's just like proving more and more true, which is we have deliberately designed a strategy and a model and a portfolio to harness demand wherever that demand comes from. Each of the products in the portfolio drives big engagement at different moments and for different reasons. That's part of the model. You're asking about news specifically. I'll just say I firmly believe that there's persistent demand for what we do in news. I think what we do in news, I hope we talk about this more, is getting more, not less, differentiated and therefore more, not less, value creating for society, for shareholders. The Times is kind of built for moments, news moments like the one we're in.
We've invested very deliberately in a disciplined way to be able to cover the world in all its fullness and multiple consequential stories at once. That is what you're seeing us do right now. I'm confident that we will continue to be able to do a version of that based on our investment strategy in a very disciplined way into news and each part of the product portfolio.
Got it. Coming off the election cycle, I think there's been questions circling news organizations regarding institutional trust and whether that's pushed consumer segments to seek out alternative content, social usually. I assume there's always some amount of editorial sign-ups or cancellations. How do you, as a business, think about navigating this level of maybe sensitivity?
Yeah. It's a great question. I think the first thing and probably the most important thing to say is that our first and most important job at The New York Times is to pursue the truth wherever it may lead, even when that is to uncomfortable places. That is the most value-creating thing we can do for society. It is also the most value and has proved time and time again to be the most value-creating thing we can do for shareholders. I'm really proud of the way we're doing that. I think you're seeing that shine now. I'll point to you sort of I think we are living in a world now where it is getting harder for everybody, not easier, to find that there's a plethora of information out there, much of it very good. There are great substacks.
There are great podcasts beyond what we make. There's a lot of good stuff out there. In an AI world and an increasingly sort of complicated internet, it's getting harder and harder to find things that are sort of true and worthwhile. I think The Times has a bunch of advantages there. One is a brand and now multiple sub-brands that increasingly people seek out and ask for by name. Two, I think we're living in a world, and this may be what you're getting at with your social point, where there is an abundance of takes and kind of punditry and less and less expert original reporting. That is the thing we do certainly and most and kind of foremost in news, but also in sports now and also in shopping advice, our Wirecutter reviews. I think that only becomes more valuable.
How do we get more? Let me just say on sort of trust, we do not take it for granted. I mean, it used to be we could put out a newspaper and assumed we had a trusted brand. And the people who would trust us would trust us. And that was a large number of people. One of the big things that we are doing now, and I think it is really useful, is showing the work to build trust. The reporter videos I described go a long way to people saying, "Oh, I get it. The pursuit of this story was fair because I know what the reporter did." The Daily, where we have reporters just come on and describe how they got a story, has long been trust-building.
Even little signals in the product, like expanded reporter bylines that say, "This person isn't just telling you the story because it's a take, but they were there on the ground, and they have years of expertise to tell you that story." I would just say I have high confidence that what we're doing there and just the work itself is more, not less, in need and that there is plenty we can do to build trust. I think the sort of state of the business, the level of engagement suggests we already have plenty of it.
Got it. So the net result of greater engagement and value is that you've been able to move ARPU higher. We've seen this for both your bundle and news-only subscribers. There is a different dynamic at play, though, for these cohorts. Maybe can you unpack the strategies a bit? What have you observed to date? What do you expect going forward?
Yeah. I mean, the starting premise, I'm going to repeat myself a little bit, but the starting premise to everything about price or ARPU, I guess two starting premises. One, each part of the portfolio is getting more valuable over time. It's getting more valuable in two ways. We are actually adding more value in each part, or we're unlocking it through better product features. Like communal play is a good example of that. That's one. Two, the thing we are ultimately aiming for here is to sustainably grow at healthy rates digital subscription revenue over the short, medium, and long term. We now have a very well-honed pricing strategy, which goes like this. Most people come in at a promotional price for the bundle or as a single product subscriber, which is an inherently low price and/or a promotional price.
We use very sophisticated data science that gets better and better as we go to get people to engage more in the product portfolio, potentially engage across products. As they do that, they are able to take on higher and higher prices because they're getting more and more value. At each part of that journey that we look at, and we've been doing this for years now, we like what we see. We have a lot of confidence in that sort of broader metric of can we keep growing digital subscription revenue at a very healthy rate? Yes.
Just on the kind of tenured news-only subscriber side, can you maybe touch on that dynamic and kind of?
Yeah. I mean, two things there. One, I would not make too much of kind of any bucket. It is a strategic choice. We are pushing people to buy the bundle. You have to work really hard if you want to find it.
I can't find it. Yeah, I don't know where it is.
Run the company. We are really trying to get people to buy the bundle. We have priced it in such a way that they do that. You are going to continue to see us. We are at just under half of the base now on the bundle. We have a lot of confidence in our ability to get more people to be there. Also, by the way, we are happy to have any subscriber. Part of the model is we are going to get you to pay us something for something that you want and a lot of confidence that we can get you to engage more and pay more over time.
Got it.
If we can't, we're still happy to have you.
We're obviously in an economically sensitive moment. I'll ask about ads in a second. As it relates to your subscription offers and when you decide to kind of graduate someone to a higher price, how does a macro situation like now factor into that, if at all?
Yeah. We're watching the macro economy and monitoring it like everybody is. You heard us talk about that on the earnings call. What I'll say is we have awesome products that lots and lots of people really love. We have a great engagement story in all of those products. We are adding value and unlocking value very deliberately in all of those products. We have a lot of confidence just in the inherent resilience of those products, kind of come what may. I would say more broadly, as a company, we've got this multi-product portfolio that answers to a lot of different kinds of demand. We've got multiple complementary revenue streams, subscriptions, ads, affiliate, licensing. We are a healthy generator of free cash flow and have a strong balance sheet.
We feel like we're sort of built for resilience to a lot of different kinds of challenges, including macroeconomic challenge.
Got it. The New York Times reported 12% digital advertising growth in Q1. You're guiding to high single digits in Q2. That sort of answers the question about current state of demand. Maybe you can unpack it a bit, what you're hearing from marketers. Also, you made a comment at earnings that you think of your ad business the way you think of your consumer business. Maybe just what do you mean by that?
Yeah. What I meant by, I mean, you see in the guide what we call it as we see it about our ad business. You saw that both in the performance and in the forward guidance for the quarter in advertising. Increasingly, we are able to say of the ad business what we say of the consumer business, which is we are in a lot of big spaces that a lot of people really care about with very big engaged audiences. We've spent, kind of like, we've spent years building a pricing model and deploying it. We've spent years building data targeting capability, sort of pre-generative AI and now with generative AI in a way that helps marketers get at those audiences.
We feel very excited about the fact that because we're in not just news, by the way, plenty of marketers are still news is a very important part of their portfolio, but sports, recipes, shopping advice, games, we are able to harness new kinds of demand. We are able to add a lot more supply. That just gives us a lot of confidence about the ad business going forward.
All right. Let's touch upon supply then. It seems like at least some of that is coming from Games and The Athletic. Maybe you could talk to, I don't know how much you've kind of pushed that so far and how nice is it to have that optionality at times of news sensitivity.
Yeah. We see kind of real running room everywhere we look right now in those products. I'd say to your news sensitivity point, plenty of marketers still want to be around news. They want to be around it because it's deeply engaging and commands a giant audience. There are lots of different ways to be around news, even very broadly defined. On Games, we've got a giant audience of very habituated people. We had no ads in the Games app until recently. We just have a big opportunity to add supply there. On The Athletic, we obviously have added supply. The more interesting thing on The Athletic is we're getting to marketers we couldn't get to before. Just new categories of marketers who are now advertising with The Times portfolio. Because we're in sports, turns out a lot of marketer interest in sports.
I would say to a lesser degree because they're smaller products, but kind of also very exciting. Same for Cooking and Wirecutter. Wirecutter is very close to intent. Cooking brings in kind of new pools of demand. We're excited about all of it. I would say the whole corpus, we feel like the whole portfolio gives us real running room.
Okay. You brought up Wirecutter. It sits within your other bucket.
Yeah. Which we've now named affiliate, licensing, and other.
Sorry. Yes. You have named it. I assume maybe the order is an indication of the magnitude.
Sorry. I feel so much better than I sound. Give me one second, and I will answer that. We're super excited about Wirecutter. I think we're eight years into owning it, maybe seven, but it has kind of gone unequivocally well. I will go back to something I referred to before. We have probably around a couple hundred people doing deeply researched product reviews. That is a more scarce thing in the information ecosystem. Deeply resourced, rigorous, independent product reviews. People love that. We like the performance of Wirecutter. We see a lot of running room there. I will give you three ways. One, new coverage areas. We launched just a couple months ago skincare, which came out to very positive sentiment. Two, we're sort of moving up the funnel a little bit on Wirecutter and giving people more shopping inspiration.
Three, as we're doing in every other part of the portfolio, we're doing more to kind of stimulate direct relationships and getting people to say, "Yes, I want this Wirecutter email," or, "Yes, I want to engage with Wirecutter in this particular way." A lot of running room there. It is a good ad business too.
Got it. A couple of weeks ago, there was a court ruling that Apple will no longer be able to charge a 27% commission on alternative payments in the app. Maybe you can speak a bit to the possible impact of Times here going forward.
We like the ruling. I'd say we are pro anything that allows us to have a more seamless path to getting a direct and a paying relationship. Generally, we're encouraged by some of the decisions we're seeing now that I think drive a sort of healthy, more competitive marketplace.
It's possible to say historically for someone in the app how they might have signed up versus going to a web page.
I mean, I think it replicates what you've heard in the market from others. I don't have much original to say there other than it's good.
Okay. We have about five minutes left. Does anyone in the room have a question they want to ask? If you do, raise your hand. No? Quiet conference. All right. Oh, we have one. Go ahead.
Thank you so much. That's really insightful. Wanted to check in on how you're thinking about equity compensation and incentives for executives and the rest of the team. Anything new or different this year? Just given the macro environment or talent retention, attracting new talent, et cetera.
Those are good sort of basket of questions. I'll say we've put a lot of time and care into the executive team and into how we pay the executive team. I think it's really balanced. I think it's sort of shareholder friendly and with a good long-term focus. A lot of incentive comp, a lot of value creation-oriented comp for shareholders. All of our executive team participates in a long-term incentive plan and has a significant portion of their comp tied up in that, which is tied to value creation. I would say we're playing a long game. I've just talked about the resilience of the business. I wouldn't expect us to make any sort of near-end changes to what we're doing. We really like where we are.
Heard it. On the expense side, there's a guide, 5%-6% adjusted cost growth next quarter. Curious on paid media expense, how you kind of think about that. We've seen it flex up a little bit for a couple quarters, come down a little. What governs that?
Most important thing to say about paid media always is that the vast majority of our subscription starts come organically. Paid media is a very useful tool. It is not the majority of how we get our subscriptions. For that reason, and many others, it is going to vary from quarter to quarter. I have a lot of confidence in our ability to be extremely ROI-focused in how we deploy paid media. We get sort of better and better at that. The tech gets better and better over time. In any given quarter, there is always a bunch of things going on from a demand perspective, even just who is buying what in the market that drives what we spend. We take a very ROI-focused approach. The model is primarily organic.
I would say more broadly, to the extent you're asking me about costs, I think we have a really good track record now of exerting real cost discipline on the business and focusing our investment into our areas of strategic advantage, which are journalism and product, and kind of consistently reallocating resources to the highest performing things so we can do that. I'll just say we've said now, I think in a couple of earnings calls, that we continue to target AOP growth, margin expansion, healthy revenue, free cash flow this year.
Got it. Maybe a final one from us. The New York Times, you're prominent in news, sports, games, shopping, lifestyle. Any other verticals where you see kind of an opportunity to use your scale and develop more of an offering in?
I like the list you already named. I think that list, news, sports, games, recipes, shopping advice, has kind of running room within it. I have told you we are building for leadership and very big, very engaged audiences in each of those spaces. I would say we continue to think there is a lot of opportunity in all of those spaces. We are very focused on that and focused on our strategy and executing well on that. I do not rule out that there could be another space. I would say the bar is high for a bunch of reasons, including we really understand now and have come to know what drives huge audience, habit, what does The Times kind of have brand, what should our brand be associated with. The bar is high.
Got it. All right. Meredith, thanks so much for being here.
Nice to be here. Thank you.