A version of this article first appeared in the “Reliable Sources” newsletter. You can sign up for free right here.
Spotify and The New York Times have something in common: Both companies are retaining and gaining subscribers by adding new kinds of content.
They’re in different businesses, but the questions are the same: “What will people pay for?” “What will keep them coming back for more?” “What can we do to keep cancellations to a minimum?” “What new features or services will attract new subscribers?” “How can we compete for the public’s attention?”
I kept noticing similarities between the announcements from both companies on Wednesday.
First, let’s look at The Times. The newspaper wowed the news industry by reporting a new paid subscriber number, 4.3 million, and by publicly setting a goal that’s been discussed internally for a while: 10 million subscribers by 2025.
Some of the NYT’s growth comes from offshoots of the core paper like the Cooking and Crossword apps. “The company also said that it generated more than $709 million in digital revenue, a number that positions it to meet another goal — $800 million in digital revenue by the end of 2020,” Tom Kludt wrote here.
Just how big can the NYT get?
“There’s reason to believe the ultimate number of subscribers could be far larger” than 10 million, Times CEO Mark Thompson told investors on Wednesday, but said he believes the goal is “realistic.”
Now, let’s talk about Spotify…
Spotify’s $500 million bet on podcasting
While most media companies are focusing on video, Spotify wants to be all about audio. Gone are the days when the company dabbled in TV-style series. CEO Daniel Ek is investing heavily in podcast production and making a play for radio listening while invoking concerns about excessive “screen time.”
Wednesday’s two acquisitions, Gimlet and Anchor, are just the start: Spotify plans to spend $400 million to $500 million on the “emerging podcast marketplace” this year, according to the company’s guidance to investors. The idea is to expand Spotify’s current offerings – betting that this will help retain existing subscribers and spur new subscribers to sign up.
Ek pitches a “massive audio opportunity”
I thought this was the most interesting part of Ek’s letter announcing the podcast pivot: “With the world focused on trying to reduce screen time, it opens up a massive audio opportunity.”
Ek, portraying video as a trillion dollar market and audio as a $100 billion market, said “I always come back to the same question: Are our eyes really worth 10 times more than our ears? I firmly believe this is not the case.”
Spotify has been leaning in this podcast direction for the past two years. Now, Ek told CNBC’s Jim Cramer and David Faber, “we want to grow the number of shows that we have.” More shows, happier subscribers, fewer cancellations, etcetera. Here’s my full story.
Now back to The Times…
The Times newsroom is bigger than ever
What can you do once digital subscriptions are firing on all cylinders? You can hire more people.
NiemanLab’s Joshua Benton wrote Wednesday: “A common goal in newspaper circles a few years ago was to someday be able to make enough money in digital to cover the cost of the newsroom. Well, at this point, the Times could pay for the newsroom two times over with just digital money. Which is probably why that newsroom keeps growing — the Times reported it now employs 1,600 journalists, an all-time high.”
But here’s a reality check
Getting people to pay for something? It’s hard. Getting people to pay for news? It’s even harder. The media world’s current push toward paywalls is underestimating just how hard it is, in my humble opinion.
Think about it. What are you willing to pay for? I pay for services that make my life better (ad-free Hulu), easier (Amazon Prime), smarter (Washington Post), safer (Nest). That’s a useful test to apply when asking whether a proposed subscription platform will work.
Related: BTIG’s Rich Greenfield tweeted: “Legacy media companies who are looking at the daunting task of entering the direct-to-consumer world should listen” to Spotify and the NYT’s earnings calls – “customer acquisition, cohort analysis tied to promos, churn, lifetime value [are] not terms most legacy media folks really comprehend.”
FOR THE RECORD, PART ONE
– The Committee to Protect Journalists “will host a press conference outside of the White House” on Thursday morning “to demand justice in the murder of Saudi journalist Jamal Khashoggi…” I’ll be there… (CJR)
– “Continuing to put up steady results across its TV and film operations, 21st Century Fox posted a dip in earnings in its fiscal second quarter while reporting ‘significant progress’ toward the closing of the Disney merger…” (Deadline)
– Snap stock closed up 22% on Wednesday… (CNN)
– Laura Bassett, formerly of HuffPost, spent SOTU day with some of “the women of CNN.” She says Kaitlan Collins, Abby Phillip, Pamela Brown, Dana Bash, Gloria Borger, Kate Bennett, Brianna Keilar, and Sunlen Serfaty embody “shine theory…” (InStyle)
Jill Abramson accused of plagiarism
Michael Moynihan, a “Vice News Tonight” correspondent, posted a troubling Twitter thread about former NYT executive editor Jill Abramson’s new book “Merchants of Truth” on Wednesday. He said he found multiple “plagiarized passages” in the book, which is about Vice, the NYT and other news outlets.
“Moynihan offered several examples in which the language used by Abramson was similar to language that first appeared elsewhere,” Oliver Darcy wrote in this CNN Business piece.
Abramson denies it
Abramson happened to be a guest on Martha MacCallum’s Fox show less than an hour later. Abramson said “I certainly didn’t plagiarize in my book.” But she also said she hadn’t read Moynihan’s thread yet.
ABC launching a new podcast all about the Mueller probe
On Thursday ABC News is announcing “The Investigation,” a weekly podcast about the special counsel investigation into Russian interference. ABC Radio will launch the series next Tuesday. Correspondent Kyra Phillips and senior E.P. Chris Vlasto will host. ABC says “the free podcast will focus on the lead up to the highly-anticipated report from the special counsel and explore its aftermath, analyzing the potential fallout and political consequences.”
– Speaking of Mueller: Here’s Garrett Graff’s latest about what the special counsel “isn’t telling us…”
– Beyond Mueller: Chris Cuomo said Wednesday night, “It’s worth remembering, very early on, the president said, don’t mess with my money. That’s a red line. Well, that line has now been erased and the Democrats are coming for the president’s taxes.”
$100 million for this pod startup
Katie Pellico emails: San Fran-based startup Himalaya announced a massive $100 million in funding Wednesday, along with plans to roll out exclusive podcast programming. Variety’s Janko Roettgers teased new shows from OZY’s editor-at-large Eugene S. Robinson and “Vanderpump Rules” star James Kennedy.
>> Uniquely, Himalaya’s recently launched Android and iOS apps boast “a tipping feature that allows fans to support their favorite shows with micro-payments,” which might help bring new podcasters to the platform.
FOR THE RECORD, PART TWO
– More and more candidates keep getting in, so it’s notable when others get out: Mitch Landrieu told John Berman he doesn’t think he’s going to run for prez in 2020… (“New Day”)
– Jeff Merkley told Elaine Quijano that he’ll make his 2020 decision by the end of this quarter… (CBSN)
– “All my friends are running for president:” This is a great story about “how Senate Democrats are navigating 2020…” (CNN)
– CNN’s next 2020 season town hall is with Howard Schultz, who’s publicly thinking about an independent run… Poppy Harlow will host the prime time event next Tuesday in Houston… (CNN)
– Speaking of Schultz, his book “From The Ground Up” debuted at #4 on this week’s NYT best-seller list…
– Cliff Sims’ “Team of Vipers” is #3 and Chris Christie’s “Let Me Finish” is #5 on the list… Meanwhile, Michelle Obama’s “Becoming” has been #1 for three straight months…
Ava DuVernay guest-edits this week’s TIME mag
TIME’s second annual Optimists issue comes out on Thursday… The issue has two covers — one featuring Cicely Tyson by Djeneba Aduayom, and the other by South African painter Nelson Makamo.
Last year Bill Gates guest-edited the Optimists issue. This year it’s Ava DuVernay. TIME says the issue “spotlights 34 people changing how we see our world and features viewpoints from notable contributors including director Guillermo del Toro, actor-activist Laverne Cox, screenwriter, producer and actor Lena Waithe, and more…”