How The New York Times Became a Tech Powerhouse
Brooke Gladstone: This is On the Media, I'm Brooke Gladstone.
Micah Loewinger: I'm Micah Loewinger.
David Carr: Hi.
Micah Loewinger: This is David Carr from New York Times.
Micah Loewinger: Nice to meet you.
David Carr: Don't keep saying I'm from New York Times, it sucks.
Micah Loewinger: In February 2010, Times Media reporter David Carr and a film crew visited the Brooklyn offices of Vice, then the edgy darling of digital media. Carr's visit to Vice was captured in Page One, a documentary about the struggle of the newspaper of record to adapt to the culture and business of the Internet.
Speaker 12: According to a new poll conducted by the Pew Research Center, more Americans are getting their news from the Internet, rather than a physical newspaper now.
Micah Loewinger: This is a poll conducted that same year 2010.
Speaker 12: It's the first time in the history of the polling that that has happened.
Speaker 13: Because we have to figure out how we can be media faster and more dynamic than everybody out there. We don't want to get hot and die, we want to get hot, get hotter.
Micah Loewinger: The next scene is probably the movie's most referenced. Carr is clacking away on his laptop in a class conference room with the founders of Vice, including Shane Smith, who's describing his Gonzo documentary; The Cannibal Warlords of Liberia.
Shane Smith: I don't know of Liberia, I don't know what's going on. I don't pretend to, I'm just a regular guy. Everyone taking about cannibalism, and the New York Times meanwhile is writing about surfing. I'm sitting there going, "You know what, I'm not going to talk about surfing, I'm talking about cannibalism."
Micah Loewinger: Carr stops him.
David Carr: Before you ever went there, we've had reporters there reporting on genocide after genocide. Just because you put on a fucking safari helmet and look at some poop, doesn't give you the right to insult what we do, so continue, continue.
Micah Loewinger: The scene captured the stubborn pride of the old guard and refusal to compromise journalistic integrity even as they were seemingly facing extinction. Fast forward to today, Vice got hot and died, bankrupt as of May, and the New York Times is hotter than ever.
Speaker 15: After years of falling numbers, the New York Times is seeing a surge urging in subscribers both print and digital.
Speaker 16: Just an unbelievable turnaround, the New York Times.
Micah Loewinger: When I was reporting this story, it originally aired back in July, I wanted to understand how the Times became a stable profitable powerhouse of the Internet at a time when most other outlets are struggling to survive. What I found is that the Times became profitable in part by transforming itself into a tech company.
Ben Smith: The Times really had been the great winner of this era that began with people wondering if the New York Times could even survive.
Micah Loewinger: Ben Smith again, he's the author of Traffic. He also spent two years in David Carr's old job as New York Times media columnist.
Ben Smith: There's a sort of maxim in the tech industry that you should follow fast and there's a strategy of fast following, and the Times really did the opposite. They followed slow, they watched, they waited.
Micah Loewinger: At the beginning of the 2010s, things were looking pretty bleak for the newspaper business. More and more readers were spending their time on social media; Facebook launched in 2004, Twitter in 2006, Google and Facebook had already gamed the ad market. Anyway, online ads were way less profitable than the print ads that had once bankrolled the paper's journalism. In 2011, the Times took a controversial first step into a new subscription business model.
Speaker 17: Executives here plan to walk a fine line to generate subscription revenue from avid readers willing to pay while still retaining casual customers who boost advertising revenue with their clicks.
Speaker 18: The New York Times has a paywall where you have to pay to read the New York Times online. I predict that it will fail within a year.
Micah Loewinger: The critics, and there were a lot of them, were wrong. According to Ben Smith, the company had timed it perfectly.
Ben Smith: They had to wait for Spotify and for Netflix to train people to pay for media, and then they launched this very painstaking effort to change their own internal culture to adapt belatedly to the Internet. The guy who is now the publisher, A.G. Sulzberger, realized that to move the place required a ritual and the Times and rituals to do the reporting. He assembled a bunch of people who are well regarded internally as journalists, and reported out the Times's struggles with the Internet, what they could do better.
Micah Loewinger: In 2014, the team produced a crisp 96-page document known as the Innovation Report. It called for a more urgent approach to social media, more data collection, and a rethinking of the Times as a truly digital-first new shop.
Ben Smith: The substance, therefore, it was pretty banal, all these people on the Internet reading stuff, you might want to write for them. I think people who thought it was banal underestimated the extent to which inside this institution, it was like a papal encyclical or something, it was a very important signal.
Micah Loewinger: Over the past nine years, the company has seen a bonanza of digital growth. Newyorktimes.com is powered by recommendation algorithms. The site uses machine learning to analyze data from millions of Times' readers and identify likely subscribers. Then there's the wellspring of apps.
News clip: The New York Times is going mobile.
News clip: The New York Times is launching a new app called NYT Now.
News clip: Over the weekend, the New York Times handed out virtual reality goggles to its readers.
News clip: In audio-only app, they own podcast player.
Micah Loewinger: All of its digital experiments repackage the news in novel and engaging ways, but they're also fundamentally an attempt to lure readers away from the biggest sites on the web. Like the rest of the news industry, the Times grew frustrated chasing traffic on Google and Facebook.
Meredith Kopit Levien: We have to win at the game the big tech platforms are playing.
Micah Loewinger: This is the Times CEO Meredith Kopit Levien, speaking at a conference in 2020.
Meredith Kopit Levien: More than 5 million people subscribe to the New York Times, which sounds like a really big number until you consider the fact that as many as 50 million people every week, land on a New York Times story, and most of them are coming there from Google or Facebook or somewhere on the Internet where they're already spending a ton of their time.
Micah Loewinger: In her mission to beat big tech at their own game, Levien has started to draw from their playbook.
Meredith Kopit Levien: The question is, will we have quality original independent journalism available to the masses in 10 years?
Micah Loewinger: Here she is speaking with CBS in 2018.
Meredith Kopit Levien: I think the answer is yes, but it requires that news organizations make digital experiences that are as addictive and unrivaled as the journalism itself.
Micah Loewinger: This word "addictive", one she and other Times leaders use regularly in interviews and earnings calls is a term with roots in Silicon Valley. Of course, it's very rare to
become addicted in the medical sense, though many of us have developed enduring habits around social media and screen time in general, which as former Facebook president Sean Parker told Axios in 2017 was the goal.
Sean Parker: The thought process that went into building these applications, Facebook being the first of them, to really understand it, that thought process was all about how do we consume as much of your time and conscious attention as possible?
Kathy Zong: How do we actually get people to engage with the Times and build a habit in which we can expect people to just come regularly regardless of whether there's like big news or not.
Micah Loewinger: Kathy Zong is a senior manager of newsroom and product analytics at the Times. She told me the company has said it's building a lifestyle brand. As one Times executive recently put it to Vanity Fair, "What does it look like for the Times to have embedded itself deeply into every single moment? How do we get every second of your day?"
Kathy Zong: The leaders of this company really want to create these touch points that people are developing a habit with the Times. In the morning waking up, checking your notifications, reading the app.
Micah Loewinger: As you're getting ready or commuting to work, you throw on the daily.
Kathy Zong: Then maybe play some games during your lunch break.
News clip: Wordle, the New York Times purchased the game for a seven-figure price tag.
Speaker 27: I'm more of a spelling bee guy myself.
Kathy Zong: You go home before you go to the grocery store, you check out the cooking app and you figure out a recipe and you then decide what to buy, and top it off with some podcast or something.
Micah Loewinger: Like say a new show from serial productions which the Times bought in 2020.
Kathy Zong: You're watching one of our documentaries that we put on Hulu or FX.
Ben Smith: I think in your narrative the one thing you have wrong is entertainment.
Micah Loewinger: Ben Smith.
Ben Smith: The FX show is kind of dead. The Times I think wisely is basically staying out of the television business, and will permit you to flip over to Netflix at night once you've read their summary of what you should watch on Netflix. They're trying to be a destination for people's whole lives in a certain way, and if they can get there, then they have all sorts of other things they can sell.
Micah Loewinger: Am I just naive for finding that slightly icky for a newspaper, or is that just the attention economy and is it just like, wake up, this is the game, let's play by the rules?
Ben Smith: I mean, I think that seems like a reasonable goal for a subscriber business trying to serve its subscribers and I'm not sure, do you find it less icky to toggle between Google and Facebook and sift through the chaos of information? I do think that what you're really suggesting is how many people want to live in a monoculture. I think the thing is some do. I think there are a lot of people who found the last decade of a social media takeover really discomforting, and like the idea of connecting with a single trusted brand and the times will just clearly be the biggest of those.
Micah Loewinger: The company's biggest growth spurt came from the so-called Trump Bump when readers flock to the Times and other outlets for the daily drip of drama and outrage.
Ben Smith: When that tide receded, what you saw was the Washington Post and many other publications were back to being struggling newspapers trying to figure out the digital transition, and the New York Times was this full surface media company that when if you didn't want to read about Donald Trump, you could get recipes, or games, or podcasts, or sports.
Micah Loewinger: Which the time says is a digital recreation of the traditional newspaper bundle.
Nilay Patel: It's remarkable how much you sound more like a text CEO than a media CEO. Maybe that's because of the structure and--
Micah Loewinger: This is Nilay Patel, editor of The Verge interviewing CEO Meredith Kopit Levien earlier this year on the Decoder Podcast.
Meredith Kopit Levien: I have the privilege of being CEO of a journalism company. We are a tech-enabled journalism company. We have extraordinary digital product development and engineering and data talent, but make no mistake, we're a journalism company.
Micah Loewinger: Obviously The Times has won the most Pulitzer Prizes for its journalism and continues to drive the daily news cycle. These labels may be squishy but they're not mutually exclusive.
Nilay Patel: Is the Times a technology company? One answer is, obviously, yes.
Micah Loewinger: Clay Shirky is vice provost at New York University and a scholar focusing on media and the internet.
Clay Shirky: The other answer is, what is a tech company anymore anyway?
Micah Loewinger: It's true that tech company is a vague marketing term. It often obscures how most of these companies actually make their money. Google is an advertising company. WeWork is a real estate company. Uber is a transportation company, but would prefer to pay its drivers as contractors who just use its software. That term tech company still connotes an era of Silicon Valley's financial and ideological dominance. An era that Clay Shirky says may be coming to an end.
Clay Shirky: At a time when Facebook and Amazon and Google are laying people off by the thousands, the sense we had of what it meant to be a tech company for the last 20 years turns out to have been on some level a zero interest rate phenomenon. These companies simply had access to a capital that other companies didn't. That what we're really going through is this big shift in even our sense of what it means to be a tech company.
My guess is that we're going to start to see is that media companies and banks especially who have had a really hard time hiring competent engaged technologists in the last 20 years, because of this competition with Facebook and Google and Amazon and so on, are going to find it easier to actually bring people on board who know how to build things for the internet. I think the Times is an early example of that category. It's a really tech savvy media company.
Micah Loewinger: This blending of Silicon Valley's strategies, ideals, and workers with those of a news organization has triggered a kind of identity crisis for some within the New York Times. Some employees told me that their leadership's resistance to the tech company label mirrors an active labor battle.
Kathy Zong: The reason that the company tries to like shy away from saying it's a tech company specifically in our negotiations in the tech guild is that we do not get paid close to a lot of what tech companies pay their workers.
Micah Loewinger: Kathy Zong again, she's the unit chair of the New York Times Tech Guild, which is the country's largest tech union with collective bargaining rights. The Tech Guild includes positions like data scientists, software engineers, and product managers. Since they won their election last year, the Times has not agreed to a first contract.
Kathy Zong: When it suits management, they will say to us specifically on the tech side, well, our competitors are the Washington Post, or CNN, or the Wall Street Journal. On the newsroom side, there was a presentation in which they compare the company more to other kinds of subscription services.
Stacy Cowley: It did have companies on it like Netflix and Spotify, and we were looking at that and going, "Huh, that's pretty interesting to see the Times positioning itself in this way."
Micah Loewinger: This is Stacy Cowley, a finance reporter at the Times and Secretary of the Times Guild, the union on the news side. She and her shop just won a hard fought battle for raises.
Stacy Cowley: Under our previous contract, the least amount of money someone could be paid was around $38,000.
Micah Loewinger: There were writers who were making 38k.
Stacy Cowley: Largely non-writer positions. Our security guards for example, our sales coordinators, our news assistants. It was always really frustrating during the negotiations when we would say, "Look, you can spend $400 million on stock buybacks." I mean, our CEO last year made in the ballpark of $7 million. That's not a number you would typically see for the CEO of something that's just a newspaper. She's starting to look like she's paid comparably to tech industry executives, and you're really turning around and telling us you can't afford a million dollars a year for a $65,000 salary floor, really? We're not stupid. We're New York Times reporters, come on.
Micah Loewinger: Two and a half years later you succeeded on that front.
Stacy Cowley: We did win our $65,000 salary floor. It was a very different company financially than it was 10 years ago. I was walking into the office a couple months ago and as I was walking in, there was a pair of teenagers taking a photo with their phones of the Times, awning outside the building and one of them said to the other, "That's the company that bought Wordle. I'm like, "Oh my goodness. This is a wild new world I live in now." As someone who wants to see the New York Times be healthy and thrive, yes, I support the concept that this is no longer a newspaper.
Micah Loewinger: You're just happy to do the journalism.
Stacy Cowley: I'd like to focus on that part.
Micah Loewinger: There's a lot to celebrate in the fact that the New York Times has figured out how to fund high quality journalism, but could beating big tech at its own game mean choking out the rest of the media?
Ben Smith: I think the Times benefits from the kind of digital scale that giant tech companies benefit from. It turned out that one search engine would win, that one social network in Facebook would win at least for a time.
Micah Loewinger: Ben Smith.
Ben Smith: My first column for the New York Times was about the monopoly, the Incredibles, and sometimes as you say scary success of the New York Times.
Micah Loewinger: In your piece, you quote an array of media muckety mucks who all said a version of, the Times is going up while the rest of us go down and eventually they'll be the last one standing. I mean, that's a pretty dire future. Do you believe that we really are on that course?
Ben Smith: I think when it came to national news where you had had a hundred newspapers around the country each doing its own version, the Times got into this virtuous cycle where they were getting more subscribers, being able to pay people more. Hiring more journalists, doing more news, breaking more news as
everybody else suffered, and then as a consumer you look around and one is vastly superior to the others.
When I last looked at this, The Times had more subscribers than basically everybody else combined in its category. That includes The Washington Post, that includes the Los Angeles Times, that includes-- just keep going down the list.
Micah Loewinger: On this show over the last two decades, we've done scores of interviews on the death of local news and the failed economics of the newspaper biz. We even wrote a jingle to herald those segments because we did them so often.
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Micah Loewinger: Has The New York Times in its raging hotter than hot success finally solved the riddle?
Clay Shirky: If Sulzberger were to pick up and move to the LA Times he would not under any circumstances be able to recreate what he'd done for the Times.
Micah Loewinger: Clay Shirky.
Clay Shirky: It's like trying to copy Harvard or trying to copy Google. There are just some fields where the company in the lead position doesn't actually have a lot of lessons even for its own competitors.
Brooke Gladstone: Coming up, so The New York Times is in a league of its own. That doesn't mean there can't be other leagues.
Micah Loewinger: What is the score? Anyone got a score?
Speaker: 5-2?
Micah Loewinger: 5-2, Hell Gate.