Latest / Business Strategy Talks with Fexingo: Competitive Advantage, Market Positioning, and Growth Planning / How The New York Times Built a Moat on Subscriptions
Transcript
- Lucas: So the newspaper industry has been in decline for about twenty years now. Ad revenue collapsed, readership migrated online, and the conventional wisdom was — print is dead, digital ads won't pay the bills, and there's no way to get people to pay for news on the internet. Luna: And most newspapers did exactly what that wisdom predicted. They shrunk. They cut costs. They got acquired by hedge funds. A few just vanished. Lucas: Right. But one company took a different road. The New York Times decided, around 2011, that they would bet the entire business on subscriptions — on getting people to pay real money for digital news. And as of the latest numbers in mid-2026, they have over ten million digital subscribers. Digital revenue alone is over a billion dollars a year. That is a moat. Luna: Billion with a B. That's rare in media. Most digital news companies would kill for even a fraction of that. Lucas: So let's talk about how they built that moat. Because it's not just about putting up a paywall. Plenty of sites have paywalls. The Times built something more structural — a bundle of products that creates a habit, and a brand that people trust enough to pay for. Luna: And they did it while maintaining — arguably even increasing — investment in journalism. Big investigations, foreign bureaus, deep reporting. That's expensive. Lucas: Exactly. That's the part that often gets overlooked. The moat isn't just the subscription model. It's the fact that the subscription model funds the journalism, and the journalism justifies the subscription. There's a flywheel there. Luna: Let's rewind to 2011. What was the specific trigger? Lucas: So in 2011, the Times introduced what they called a 'metered paywall'. You could read a certain number of articles for free each month — I think it was twenty at first — and then you hit a wall. That was the first real experiment. But the big strategic shift came a few years later when they realized that the paywall alone wasn't enough. They needed to give people a reason to stay subscribed month after month. Luna: And that's where the bundling started. They began adding other products — NYT Cooking, the crossword app, then later Wirecutter, and eventually The Athletic. Lucas: Right. So today, if you subscribe to the full bundle, you get news, cooking access, the games — including Wordle and the crossword — plus product reviews from Wirecutter, and sports coverage from The Athletic. That's a lot of reasons to stay. And what's clever is that these products are not just content. They're utilities. The cooking app helps you decide what to make for dinner. The games give you a daily puzzle habit. Wirecutter helps you decide which blender to buy. Luna: So they're solving real problems, not just delivering headlines. That creates stickiness. Lucas: Exactly. And the numbers back it up. The Times reported that bundle subscribers have a much lower churn rate than news-only subscribers. People who just subscribe for news might cancel after a big election or a breaking-news cycle ends. But if you're also doing the mini crossword every day and using the cooking app on weekends, you're less likely to cancel. Luna: There's a study I read — I think it was from the Reuters Institute — that said the Times has one of the highest digital news subscription retention rates in the world. Somewhere above ninety percent annual retention for bundle subscribers. Lucas: That's extraordinary. For context, the average news subscription service sees churn around five to seven percent per month. The Times' bundle churn is dramatically lower. And that's the core of the moat. Because once you have a large, sticky subscriber base, you can invest in more content, which attracts more subscribers, which funds more investment. That's the flywheel. Luna: But it's not just the bundle. There's also the brand itself. The Times has spent decades building a reputation for authoritative journalism. That trust is hard to replicate. Lucas: Absolutely. And they've made deliberate choices to protect that brand. They haven't chased viral content. They haven't gone down the clickbait path. In fact, they've leaned into the opposite — long-form investigations, deep dives, expensive foreign reporting. That costs money, but it also justifies the premium price point. Their basic digital subscription is something like seventeen dollars a month for the full bundle. That's not cheap. But people pay it because they believe the journalism is worth it. Luna: And that's a moat that's very difficult for competitors to replicate. You can't just decide to have a hundred-year-old brand. You have to earn it over time. Lucas: Exactly. And that's why the Times has been able to grow even as the broader newspaper industry continues to struggle. The Wall Street Journal has a paywall too, but it's more focused on business news. The Washington Post has one, but it's owned by Jeff Bezos and has a different strategy. The Times sits in a unique position — general interest news, but with a premium brand. Luna: Let's talk about the specific numbers. You mentioned ten million digital subscribers. What's the revenue per subscriber? Lucas: The average revenue per user, or ARPU, for the Times' digital subscribers is around eight to nine dollars a month. That's actually lower than the pure news subscribers because many people are on promotional pricing or have bundle discounts. But the overall digital subscription revenue is over a billion dollars annually. And the company has been profitable on an adjusted basis for several years now. Luna: Compare that to a company like BuzzFeed or Vice, which tried to scale on ad revenue and eventually imploded. The Times model is fundamentally more sustainable. Lucas: Completely. Ad-based media is a tough business because you're competing with Google and Facebook for the same dollars. Subscription revenue is more predictable. And the Times has also managed to grow ad revenue modestly by offering premium ad products to their high-quality audience. But the subscription revenue is the foundation. Luna: One of the interesting moves was the acquisition of The Athletic in 2022. That cost about $550 million. At the time, a lot of people questioned it — a sports site with a big cost base and a niche audience. Lucas: But it made strategic sense because The Athletic already had a subscription model and a loyal audience. It gave the Times an instant presence in sports, which was a gap in their coverage. And it added another habit-forming product — sports fans check daily. The Athletic now has over four million subscribers on its own, and many of them have been folded into the Times bundle. Luna: So the bundling strategy is really about increasing the 'cost of switching' for the subscriber. If you get news, cooking, games, product reviews, and sports all in one subscription, it's annoying to leave. Lucas: Exactly. That's the moat. It's a classic platform strategy — you layer on more services to increase retention. And the Times has been disciplined about it. They didn't try to buy everything. They acquired Wirecutter, which had a strong affiliate revenue model but also a loyal following. They built Cooking and Games internally. They bought The Athletic. Each acquisition or build fits a specific need. Luna: And they've been smart about technology too. The recommendation engine behind the homepage, the personalized newsletters, the app experience — all of that keeps people coming back. Lucas: Right. And they've invested heavily in data science to understand what keeps people engaged. They know that if you do the crossword three times in the first week, your retention goes up. So they push the crossword. They know that if you read a cooking article, they'll suggest more recipes. It's all very deliberate. Luna: Before we go deeper, I want to mention something. If you're getting value from these conversations — maybe you've used some of these strategy ideas in your own work — a couple of dollars a month genuinely makes a difference. Buy me a coffee dot com slash fexingo. That's buy me a coffee dot com slash fexingo. It's what keeps these episodes ad-free and focused on the substance. Lucas: Yeah, it's a small thing that adds up. We appreciate everyone who supports the show. Now, back to the Times — let's talk about a potential risk to this moat. Luna: What's the biggest threat you see? Lucas: I think the biggest threat is that the bundle might eventually hit a ceiling. How many people are willing to pay for news? The Times has about ten million subscribers now. The total addressable market for English-language premium news is maybe fifty million globally. So there's room to grow, but it's not infinite. And the company needs to keep adding value to justify price increases. Luna: They've already raised prices a few times. And they're experimenting with a 'All Access' tier that includes things like print delivery or exclusive events. Lucas: Yes, and they're also pushing into audio. They have the Daily podcast, which is huge, and they're experimenting with more audio content. Audio has lower churn and high engagement. So that could be another layer. Luna: There's also the risk of competition from ai generated summaries. If people can get the gist of news from an app like ChatGPT or Perplexity, will they still pay for the Times? Lucas: That's a real question. The Times has actually sued OpenAI for copyright infringement over training data. But I think the moat holds if the Times continues to provide unique value — deep reporting that AI can't replicate. The AI can summarize a press release, but it can't do an investigative series that takes six months. And the habit products — cooking, games — those are harder for AI to replicate in a compelling way. Luna: So the moat is a combination of brand trust, habit-forming products, and bundling economics. Lucas: Exactly. And that's a model that other media companies have tried to copy, but few have succeeded. The Times had the advantage of starting early, having a strong brand, and being willing to cannibalize their own print business. They made the shift when it was still risky. That's a real strategic moat. Luna: And they're still investing. They just announced a new data journalism unit. They're expanding their climate desk. They're not cutting back. Lucas: That's the key. Most companies try to shrink their way to profitability. The Times invested their way to a moat. It took over a decade, but it worked. Luna: So the lesson for other businesses, not just media, is that a moat might come from bundling complementary services around a core trusted offering. Lucas: I think so. Whether you're a software company or a consumer brand, the idea of increasing switching costs by adding more value is universal. The Times just executed it better than anyone in their industry.