We're gonna get started. I'm happy to have back at the conference this year, from The New York Times Company, Meredith Kopit Levien, President and CEO. Thanks, Meredith.
Thanks for having me. It's good to be here.
Okay, you are now well into what you've termed, the next phase of your journey, part of which is focused on transitioning The Times from single products to a bundled offer. How would you benchmark your progress at this point toward long-term goals, and where are you focused currently?
Yeah. Well, thanks for having me. It does feel a little bit like congressional testimony with this mic set up, so I'll just get that out there.
Good to know.
Look, I think the first thing to say is we have a really clear strategy, and we feel like we're executing well on it in a pretty complicated market. I'll name some things that we've said should be markers of our progress that I do think we're making real hay on. The first one is the bundle. Like, I'm sure we'll get into that, but everything about the bundle is going well. Subscriber engagement is going very, very well, and that's going well against a pretty complicated audience backdrop. We can talk more about that.
We are doing a number of things on price that we feel very good about. We're now in market with what I would say is a sort of full complement of pricing activities, all of which hang from very deliberate strategy and price, that is really bearing fruit. We have talked for probably a year now, maybe even a little longer, about being able to demonstrate that we can actively manage our costs, that's going well. We've shown that in actively managing our cost growth in particular over the last three quarters. What that adds up to, which is what I think you're getting at, is in terms of our medium and long-term goals and progress against them.
We have said that we are aiming to begin expanding our margins on a consolidated basis this year, and that in particular, this year we were aiming for, you know, the start for that to begin with modest margin expansion. I would say we're still aiming for that, you know, assuming the ad market doesn't get much worse than expected. If it does, we're not gonna do anything that would take us off our strategy, but our aim now is to deliver it. I would say on, you know, we've put out a next mile marker of 15 million subscribers by 2027, and we feel on track for that.
We have asserted that we don't expect that growth to be linear, but this year where, you know, we don't regard it as having a lot of tentpole kind of known news events, we are pretty focused on building our engaged prospect funnels, which we are making good progress on, and subscriber monetization, which I'm sure we'll talk about. Overall, feels good.
Okay. That was a great high-level overview. We'll touch upon all that.
Yeah.
This past quarter, New York Times crossed three million bundle or multi-product subscribers. I think you called out a record for bundle starts, bundle upgrades. We wanted to see if you could speak to how you've repositioned marketing and product toward the bundle strategy to get that uptake from new and existing readers.
Yeah. Let me just as a reminder, why does the bundle matter so much? You know, we believe having news in combination with leading lifestyle products means we can penetrate our TAM better, and for the subscribers who do come, they engage more, they stay longer, ultimately they pay more. That's the thesis. I would say, because of that, we are, you know, using all the levers we have to drive people into the bundle. You named two of them, product and marketing. I'll talk about each and a third.
On the product side, we have a working insight that if you come to The New York Times, any of our products for one thing, and we can get you to do just one more thing that, you know, correlates very well with staying longer, ultimately paying more. We've got a lot of product work going on under the hood to get you to kind of run into and engage with that one more thing. And it can be any of the things we offer. I'll just remind everybody, we have five products now. Obviously news, games, shopping advice, and Wirecutter, sports and The Athletic, recipes on NYT Cooking.
One of the really obvious product interventions we've made is there's a Play tab now in the core The New York Times app that's been a real boon to getting people to engage more. You can just imagine, we're using all of our major product surfaces like the homepage, like our morning newsletter, which has a huge audience, to promote our products beyond news so that you run into other things. That's really working well so far. On the marketing front, I'd say, there are a few things happening. One, we have all these products beyond news now, and we're using those funnels, the cooking funnel, the games funnel, et cetera, to drive people into considering the bundle.
Maybe before you'd come in for a recipe and we would ask you to buy Cooking, now we're also suggesting and making it attractive for you to buy the bundle. We're using the other products to generate interest in the bundle. We're also, you know, we do a lot from a creative standpoint to tell you what The New York Times is all about. Increasingly we're using our marketing creative to say we are news and all this other stuff. In fact, we just actually launched our first major brand marketing campaign, it's called More of Life Brought to Life, that's focused on we have a bundle, we've got, you know, all these other things you can do. As I say that, it's just worth remembering, 'cause I said there are product levers and marketing levers.
The majority of our subscription starts don't come from paid marketing. They actually come from those levers in the product that I described. We do have plenty of opportunities to kind of describe things to people. The last thing I'll say, and actually think it's important, is we're also testing our promotional price as a lever to get more people to use the bundle. We're a few years into using a $1 a week as a promo on news, and we're testing the degree to which, for the bundle, that can be a lever to, you know, get enough conversion lift that you're growing aggregate LTV.
I'd say you put all of those things, particularly the first two marketing levers and product levers, kind of together support our belief that over the next few years we can get 50% or more of all of our subscribers on the bundle.
Okay. That increased engagement that you spoke about before. Okay.
Too close?
Okay.
Thank you.
Sorry about that. Is that engagement primarily, you know, a sub who is mainly on news now taking another product? Is that sub who is on news just by being in your ecosystem more engaging with news more as well, right? Is it more verticals...
Yeah . It works both ways. I mean, my favorite thing to tell people it is, it's just as likely for somebody to drop into our funnel to play Wordle and then go to news as it is the other way around. It sort of all feeds on one another. I'll just mention that we've been really deliberate about choosing the spaces we're in beyond news, for two things. One, you know, these are giant spaces where there's a lot of interest, and obviously that The Times has permission to play. Sports is a great example of that. They're also spaces where you're gonna have repeat engagement because you're interested there. You know, you don't only cook once, you don't, y ou know, if you follow a sports team or a league actively, you're not just gonna do that once in a week. You're gonna come back very often.
Games, many people play every single day. You know, the whole idea here is these are all forces that can drive up engagement and the, you know, the differential that we see is people who subscribe to the bundle consistently engage, you know, 10-20 percentage points more on kind of a weekly basis than if you just buy news.
Got it. Okay. The Times began to ramp the bundle strategy, I think, around this time last year that followed the Athletic acquisition. I'm assuming that means some of those initial bundle cohorts are now either lapping or coming up to the end of their promotional period. Any early view on retention versus, like a news promo sub? You know, how fast you think you can kind of graduate them to that full price?
Yeah. My short answer is, it's really early, but so far we like what we see. Just so everyone understands, we've got a long history of bringing people in news in at promotional prices, getting them to engage in a year, at the year mark, stepping them up to an interim or a full price based on that engagement, increasingly more to full price over time, and then ultimately, getting them to pay full freight. That's what we're doing now on the bundle. While it's early, so far, retention looks stronger than news only, and ARPU is better. That's kind of the strategy in action playing out as we expected it to. Still early, but good so far.
Going back to the stat or target you just gave for maybe where the bundle could go as a percentage of subs.
Yeah
Over time, right? If we think about your subscriber base, there's, you know, there's a minority, but still material portion that's international. Is the bundle offering, you know, does that resonate as much abroad? Does that require you to tweak that non-news product somewhat to make it more palatable for those audiences?
I would say yes and yes. Let me give a little color there. In general, the uptake on the bundle outside of the U.S. is about the same as it is, you know, close to what it is in the U.S. I wanna say that's been a pleasant surprise for us. We had assumed that of the products beyond news, some would resonate more than others, and that might make bundle uptake lower outside the U.S. In fact, it's been, you know, basically as strong. Just to give everyone the data, the latest stat on bundle uptake generally we've put out is, as of the end of last year, 30% of starts were coming in on the bundle by the end of the year, and we said that went up in Q1.
You can assume we're seeing that internationally and domestically. The second part of your question is, you know, what do you have to tweak? I think you're asking what do you tweak to sort of see that continues to grow. We think The Athletic and Games will be particularly resonant outside the United States. On The Athletic, you can imagine, as we get better and better sort of geotargeting, there's even more running room there. Games has been the big surprise. People love Wordle everywhere.
Everywhere. Okay. I wanna touch upon the topic of traffic. For most of The Times' digital journey, I think social media could be relied upon as a distribution funnel for your product.
Yeah.
That option's not gone, maybe because of TikTok or the way others responded to TikTok, it's maybe a diminished source of referral. You've been out in front of this, you've highlighted this, maybe focusing in a bit, you know, are you seeing this impact on a particular kind of segment of your reader potential sub? What can you do to sort of widen that funnel back up?
Yeah. It's a good question. I would say the distinction to draw is sort of subscribers and the casual audience. Subscriber engagement, as I said at the top of this conversation, has been remarkably strong. I would say that's 'cause the quality of the products. It's also because we are doing a lot of product intervention to sort of drive that. That is remarkably strong-even kind of in a tough traffic environment where we've seen real pressure from the platforms, I'd say it's all of them. You mentioned Facebook, you said diminished. They're like close to out of news with the closure of News tab. We've seen that really hurt us on the casual audience front, I would say there's a second thing going on, which is just the news cycle has changed, right?
Right.
You know, doesn't mean there's not still plenty going on in news. There is. It's important for me to say we are long on news. News cycle's gonna ebb and flow, sort of over the long arc of what's to come, we think, you know, there's only gonna be more demand for our news product. What we've seen, you know, this, you know, in this particular moment, say for the last few quarters, is we've gone from these, like, singular dominant news stories, the politics story, then the COVID story, to a much more varied news cycle. That's.
Right
That's what's happening. What we're doing about it's just worth saying this is what our strategy is about. You know, we feel like the combination of news plus these leading lifestyle products sold, you know, very actively in a bundle or on their own, gives us some resilience to a news cycle that's ebbing and flowing. There are now plenty of reasons, let's say, in a day or a week or a year to engage with The New York Times that go well beyond news. There's, you know, there's sort of a cadence to when people have high interest in cooking, when they have high need for shopping advice. The sports calendar is sort of robust all year long with lots of different peak moments that look different than news and so forth. That's the idea here.
We're quite focused this year on building out, you know, strengthening the audiences for our non-news products, which in many cases, kind of build their audiences in different ways.
On that topic, I think with The Athletic, you're doing more daily sports coverage, more live sports coverage.
Yeah.
How do you win mind share there versus someone who might just go to ESPN for that type of?
Yeah
Coverage?
Yeah. Let me say a couple things about that. In the 1st quarter, we said our audience for The Athletic was up 50%. That feels great. That's part of a very deliberate strategy to say, "Let's open up their paywall. Let's really build a prospect audience." You know, even The Athletic being up 50% in a quarter, if you look at that relative to other sports sites, it's still a tiny audience. What I'm really saying is there is plenty of running room to keep growing The Athletic audience. Relative to ESPN, I would say sports is a really big market. The Athletic has very low awareness. It's seven years old now. We bought it when it was six. It had about a million subscribers when we bought it and a hard paywall.
I would venture to say very few people beyond its million subscribers really knew it existed, and we have the whole kind of promotional power of The New York Times.
Right
To help people know it exists. I'll say one more thing 'cause you asked me about what are we doing in the actual journalism.
Yeah
On The Athletic to change that. A few things. You know, we acquired The Athletic because it was very good at helping the passionate sports fan follow the team that they loved. Very very good at that. We are still doing that. What we're adding to that, and this is what's really helping us drive more audience, is three things. We're getting better sort of in the live moment around sports, and The Times is quite good in live moments. We're bringing a lot of that expertise to The Athletic. For example, The Athletic is always very good at covering the NFL draft, the run-up to it, what happens after. We are now also quite good in that moment of the draft. The live moment in a game or around a big event, we're getting better at. That's one.
Two, I'd say The Athletic is just getting even more sort of on the news. You know, everybody's talking about the idea that Aaron Rodgers may be traded to the Jets. In addition to the fact that we're gonna write the story after he is traded, which we would've done before anyway, now we can sort of swarm that story as it's unfolding in a much bigger way. Just the third thing to say is The Athletic had been very sort of team-focused, and now we're adding to that a more comprehensive, like, national layer.
Right.
If you follow the team, you also probably care about the big news happening in that league around it.
Understood. You recently announced that you will execute a price increase for tenured subs. I think first this is for news and games, then cooking later in the year. Obviously, it's interesting because, you know, arguably we're heading toward a slower economic period. You can debate that. Can you give some background on the decision here, the confidence that you can execute this with fairly limited churn?
Yeah. Like, I'd step back and say, we are always looking to sort of balance growing volume of subscribers and, you know, share of subscribers in a moment where habits are really up for grabs and driving price. We're, we're always looking to do those two things in the right balance. Ultimately, we believe we can grow both of them, right? The, the work here is to grow aggregate lifetime value. What we're doing in this moment is for a group of tenured subscribers to news and a group of tenured subscribers to games, we're increasing their price, and what gives us confidence to do it is, one, we've got a long track record here.
You know, we did a fairly sizable increase to the news price, for tenured subscribers in 2020 and spilling a little bit into 2021. That went very well.
Yes.
We know how to do it, one. Two, I would say the products themselves have gotten, if you use them, you know this, increasingly valuable. You know, the journalism continues to get more varied in its formats. In news, we add journalists, we cover more things more deeply, more richly. In games, we keep adding more games, so the products themselves are more valuable. I would just say we're able to execute really well here. We have been building, a real data science capability to say sort of how do you ask people to go up in price? What is the best way to do that? Of course we tested it.
You know, we tested this very actively, I think at the end of last year, and rolled it out at the beginning of this year. So far we like what we see. We're, we're doing it, you know, the way we do much of what we do at The New York Times, which is very thoughtfully and deliberately, and we really like the result we see so far.
Okay. on the earnings call, I think Roland highlighted it was gonna be around 1.5 million subs that would get a price increase notification this year. I think we can estimate around 1.2 million of those are News, some getting just news, some getting news plus another product. Should we think of that figure as sort of your fully tenured news base and the balance around on promo or... Grat, you're shaking your head, so.
No.
The answer's no. Okay.
I would say that is a group of people who we put into that bucket for a price increase for a number of reasons. They have a certain amount of tenure. It's not all tenured subscribers. Certain amount of it, they have enough distance from being on a promotional price.
Right.
That plays a role in this. Two more things. Domestic, we're only doing this at the moment domestically. This is a significant one. They didn't come to us through a third party, so they came to us to subscribe directly. You can take from that the sort of tenured base is a, you know, substantially larger group of people.
Okay. For those multi-product subs that are buying News plus Cooking or News plus Games, is this an occasion to kinda use a price increase to get those people into the bundle? I mean, I think the difference is $3 or something like that.
Yeah. I mean, ultimately, that's the idea, right? We make, you asked me earlier, like, what are we doing to drive the bundle? I would say everything we can possibly do. Every lever that we have, and ultimately, there is, it's just a more rational idea if you're gonna take a price increase in news, take it on games. It may make more sense.
Yeah
To buy the bundle. News goes from $17 - $20. Games goes from $5 - $6. It might be more rational to pay $25 and buy the bundle. Ultimately, that is part of it. If I were to step back, I would say there's two benefits to us as we do that price increase. One, you know, we have pricing power. We've got a group of people who are willing to pay it because they're getting more value. Let's take it where we can. Two, if we get you to make the choice to buy the bundle, we just have more ways to engage you over time, more levers to get you to stay and ultimately, potentially pay more. That's the sort of broader reason we're doing it.
Got it. I wanna move on to advertising. The New York Times group reported digital ad sales down 12% 1st quarter, there's some nuance there between direct sold versus programmatic and creative services and podcasting. Also, just as we're, you know, past the halfway mark through the quarter, wanted to see if there was any update you could provide on the demand environment.
Try and answer both of those. On the second part of your question, I'll just say, we have nothing new to say beyond the guidance we gave, the guidance we gave for second quarter advertising would suggest slight improvement from what we saw in the 1st quarter. Beyond that, I don't have a lot more to say. On your question of what were sort of the underlying pieces to what we saw in the first quarter, the real bright spot was the core of the digital ad business that we expect to make advertising a medium and long-term growth driver is premium ad canvases, digital ad canvases with first-party data that marketers use can use to target in high-performing, you know, privacy-forward ways.
That grew in the 1st quarter, and that's like the main bet we've got in advertising, and that gives us real optimism about advertising. Again, as you get through a potentially a down cycle in a market, advertising as a business, digital advertising as a growth-driving business.
Got it. You recently announced the hiring of a global chief advertising officer. I think this is the first from outside the company.
Since me, 10 years ago.
Since you?
Yes.
Okay. Got it. Maybe you can speak to. How that ties into the longer term goals for The Times and The Athletic?
Yeah. Well we're super excited about her. Her name's Joy Robins. She's coming to us directly from The Washington Post. She actually ran ads and subs there. She's a big figure there, but she has a long track record of experience in sort of publishing-based ad businesses. I would say the most notable thing about her, she's, you know, known as a very good leader and a good boss and strategic, but she's a big figure in the ad market. I would say we have a lot of optimism around that. We think our product set is, in advertising, is differentially valuable. We should be speaking in an even louder voice to marketers about what we can do for them, and we saw her as somebody who could play a very big role doing that.
She is off to a running start. She's about 1 month in this week, and we couldn't be happier that she's there. I'll say, one other thing, which is, you know, bundle, bundle as it relates to subscribers, but also as it relates to our ad business. You know, we have a real opportunity to take these premium ad canvases and this first-party data strategy, where The Times really does have proprietary advantage. You know, we do something like a couple billion page views every month, and we've got a huge base of registered readers whose data we can use in privacy-forward ways. The idea is we take that now, we extend that to sports, and we extend it to recipes, and we extend it to games, and maybe even to shopping advice, maybe even to Wirecutter.
That's where we see a lot of this growth, the growth in this business to come. We know that's what Joy was most excited about as well.
Got it. I wanna shift topics a bit, ask you about AI, which has been a topic of?
AI?
Yeah. I'm interested to get your early view on how you think this could potentially impact how consumers get their news and information, and what does that mean for The Times in terms of risk or opportunity in your relationship with your readers?
Yeah. Well, let me first say it's early days, but The technology is moving very, very quickly, so as you might imagine, we've got very smart people on the case, and we're thinking very hard about a potentially profound change in the information ecosystem. I'll say there's a handful of things we're particularly focused on. One is we have an enormous amount of IP that has differential value, proprietary IP, and we're thinking very hard about how that value would manifest in a, in a potentially really different ecosystem. That's one. Two, we're thinking a lot about trust. You know, The Times has almost two centuries of kind of building a brand and building trust and authority in the spaces we play in, especially in news.
We're all operating in a fairly low-trust environment right now, and we think, in this next world we may be moving to that, companies that have a brand and have a lot of authority and a lot of trust and a lot of direct relationships, that will be of paramount importance. Thinking hard about trust. We, we've been asked a lot about how do you think about the work of journalism in an AI world. I wanna say that, for our news journalism, but even more broadly for our content, this is first and best and kind of most a human endeavor. You know, news journalism is about sort of bearing witness and then translating that with expertise and judgment into understanding for people.
I don't see AI replacing, for example, our journalists on the front lines.
Right
In Ukraine or even, you know, the talented people who are making new recipes for The New York Times, or inventing new puzzles and games. We are, of course, thinking about how could AI help get that material out.
Sure
To many, many more people in any number of ways. Like every other company, we're thinking about what are all the ways we can scale business practices and make those business practices, you know, potentially much more efficient because of AI.
Got it. We have about five minutes left. If anyone in the room has a question, you can raise your hand. We've got one over there in the aisle. Two, actually.
Thanks. Your prior comment's a perfect segue to what my question is. I'm thinking in terms of AI and deepfakes. You know, I agree with you, trust is at an all-time low. I think that's an objective fact at this point. My personal opinion is it's probably gonna get worse before it gets better. I think about where AI is in terms of Deepfakes and what real news is. How do you think about that and sort of combating that so we can actually have a foundation where we say, "Okay, this is objective truth.
We may not agree with it or we may then wanna debate it, but here's a fact pattern that we can discuss and not have to worry about did President Biden or President Trump say this or not say this because there's AI that wrapped around it that may have been put into place to really, you know, spark a reaction from various sides. Thanks.
I'm gonna resist giving you a very long answer here. I could talk about this for hours, but I will just say, I think this is a huge issue, and I think that news at its best, again, is not just a human endeavor but is engaged in as like a relationship business where you can go to a provider who stands for a process for its gathering and the process for bearing witness in a way that is kind of open and independent and then translated in an open and independent and fact-based way to understanding. We're gonna stand very assertively and firmly for that process. Obviously, for people knowing this news was created through that process by a trusted brand.
I think that's, you know, how that sort of manifests in the ecosystem is gonna be very important, and we're very focused on how people can get a piece of journalism and know this is from The Times, and this is the process that went into getting this piece of journalism. Which is what I think you're poking at. How do people know the process? Is this real or not?
Go ahead.
Just one question on subscriber adds. When you look at the last few years of the news cycle and the tentpole news and the pace of subscriber adds and how what you're experiencing now, has the experience changed your point of view on the subscriber target or the pace of additions? You know, were you adding subscribers at an extraordinarily high rate because we were going through an extraordinary period, so you should just modulate your perspective on the rate of growth going forward?
We are still aiming for 50 million subscribers by 2027. Believe we're on track for that. As I think I said before, we don't expect that to be linear in terms of its progression. In fact, we've been pretty assertive about saying at present, we're really focused on building engaged prospect funnels and on subscriber monetization. Our strategy was kind of purpose-built for a changing news cycle and one that is gonna ebb and flow, and it's, you know, why we're. I wanna be clear, I am and we are long on news. We're in sports journalism and recipes and shopping advice and games, and we think all of those things collectively will give people reasons to buy The Times, stay with The Times, pay more over time. We remain, you know, on track for that and optimistic about it.
Well, we'll just go here first.
I didn't want to accidentally.
No, no.
If someone-
I think I'll take that.
Well, you're giving someone else the nod.
I'm done with the mic.
Follow-up question to the last or observation to the last one. Seemingly, I'm wondering about the volatility in the presidential election cycle, rather than if that's in the past. I think, Trump created a lot of headlines that were very timely.
New York Times has been in business even longer than he was involved in politics. I would say the pattern that we've seen is elections have in the past been brisk periods for audience engagement and subscriber growth. You know, to the extent history suggests how it will go, you know, that's on our minds. I would say we are also there are many other things going on in news. You know, there's been a war, you know, on the ground in Europe now for like 460 or 70 days that we're covering very actively and many other stories. As the news cycle ebbs and flows, interest is gonna pop, you know, for different things at different times.
Again, the strategy is built so that even beyond news, there are many reasons to come to and engage with The New York Times.
Okay. Unfortunately, I think we're out of time, so we'll have to end it there. Thanks so much, Meredith.
Okay. Thanks. Nice to be here.
Thanks.