In the Digital Subscriber Race, NYT Takes the Lead

Yesterday morning, The New York Times announced that it had officially hit 1 million digital-only subscribers — a huge milestone in the newspaper industry’s change in focus from print to online. The announcement came in conjunction with the Times’ Q2 earnings release, in which they reported a $16M profit.

The 1M mark is a breakthrough, for sure. A celebration, not quite yet, but this means that theTimes has taken the lead in creating a model for paid digital content that can effectively offset losses from a dwindling newspaper business. (FYI- The Wall Street Journal is close behind, at 900,000 paid subscribers, while the Financial Times’ digital subscription number stands at 520,000, according to Nieman Lab.)

As Mark Thompson, president and CEO of The New York Times Company, said in his announcement:

“We believe that no other news organization has achieved digital subscriber numbers like ours or comparable digital subscription revenue. It’s a tribute to the hard work and innovation of our marketing, product and technology teams and the continued excellence of our journalism.”

Those 1M subscribers aren’t just signaling a deepened preference to access news on mobile platforms, but a serious commitment to pay for it, a critical indicator for the industry’s bottom line that now relies more on digital subscriber revenues to combat advertising challenges associated with lower print subscribers.

What’s most important about this milestone is that it’s been more than a decade in the making, and it proves that this model might indeed be the one that sticks. For a journey back through time, The New York Times had been playing with paid digital platforms since the mid-2000s. In 2011, they experienced what was thought to be a significant boost in digital subscribers when they announced that “paid digital subscribers have surpassed 100,000.”

The problem with many of the fits and starts that we’ve seen in the news industry’s attempt to launch and build digital paywall services is that there’s often a large peak at launch before the growth trails off.

This time, though, it’s different. In reaching the 1M mark, The New York Times can now effectively say that it is diversifying its revenue streams in a way that can offset the loss of traditional ad revenue. Is the growth in digital subscribers paying for the cost of the newsroom? Not quite yet, but it’s getting there. (Again credit to Nieman Lab, which estimates a NYT newsroom budget of $200M a year, while digital-only readers will add about $185M to the coffers this year.)

The evolution of the newspaper business is far from over, but this number is an important one to remember — and even more interesting to track 12 months from now.

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