Latest / Business Strategy Talks with Fexingo: Competitive Advantage, Market Positioning, and Growth Planning / How The New York Times Built a Moat in Digital Subscriptions
Transcript
- Lucas: If these conversations have moved your work forward in some small way, today's angle hits on a question I hear all the time from founders and media execs: how do you build a subscription business that people actually stick with, not just sign up for and forget? Luna: And I bet you're going to say the answer is The New York Times. Lucas: Exactly. The New York Times has built what I think is one of the most durable moats in digital media. And it's not just about journalism. It's about bundling, pricing, and a willingness to cannibalize your own print business. Luna: Let's start with the numbers. The Times ended 2025 with over 10 million digital-only subscribers, and digital revenue now accounts for roughly 70 percent of total subscription revenue. That's a massive shift from even five years ago. Lucas: Right. And the key move was the bundle. In 2020, the Times started bundling its core news product with Cooking, Games, and later Wirecutter. Then in 2022 they acquired The Athletic, which added sports. Today, about half of new subscribers choose the All Access bundle, which gives you everything. Luna: So the moat is really about breadth. You're not just subscribing for news — you're getting recipes, crossword puzzles, product reviews, and sports coverage. The switching cost becomes enormous. Lucas: That's exactly it. And the pricing is clever. The basic digital subscription is 17 dollars a month. The All Access bundle is 25. So for eight extra dollars you get Cooking, Games, Wirecutter, and The Athletic. Psychologically, that feels like a steal. And once you're in the bundle, you're less likely to cancel because you use multiple products. Luna: But isn't there a risk of subscriber fatigue? People are feeling subscription overload. Netflix, Spotify, Peloton, The Times — at some point, people cut. Lucas: That's a real concern, and the Times addresses it in a couple of ways. First, they've kept churn relatively low — around 5 to 6 percent monthly for digital, which is good for news. Second, they've layered in habit-forming products like Games. Wordle alone, which they acquired in 2022, drives millions of daily users. If you play Wordle every morning, you're not canceling your subscription. Luna: So the moat is part product breadth, part habit. But what about the competitive threat from Substack and independent writers? A lot of top journalists have left traditional outlets to start their own newsletters. Lucas: That's a real pressure point. The Times loses some high-profile bylines, and readers follow them to Substack. But the Times' counterargument is scale and trust. An independent writer can offer one great column a week. The Times offers 20 desks, investigative reporting, foreign bureaus, and a 170-year-old brand. When you need to understand a breaking news event, you go to the Times, not a Substack. Luna: Fair. But that value proposition only holds if the journalism is excellent. And journalism is expensive. The Times spent roughly 300 million dollars on newsroom costs in 2025. That's a huge fixed cost that independent writers don't have. Lucas: That's the bet. The Times is betting that by investing heavily in quality journalism, they make the subscription indispensable. And so far, it's working. But the margin is thin. The company's operating margin in 2025 was around 12 percent — decent, but not huge. They're not printing money like a software company. Luna: So where does growth come from next? International? Younger audiences? The Times has talked about reaching 15 million subscribers by 2027. Lucas: International is a big piece. About 20 percent of digital subscribers are outside the U.S., and that number is growing. The Times has invested in more international reporting and even launched a Spanish-language product. Younger audiences are tougher — they're harder to convert to paid news. But the Games and Cooking products help bring them in the door. Luna: I want to come back to the bundling strategy, because I think there's a lesson there for any subscription business. The Times didn't just throw products together. They made sure each product had its own strong value proposition. Lucas: Totally. Cooking has a huge library of recipes and a strong community. Games has Wordle, Spelling Bee, the crossword. Wirecutter is the gold standard for product reviews. The Athletic has deep local sports coverage. Each one could stand alone. But the bundle makes them more valuable together. Luna: And the pricing is smart. They don't discount the bundle heavily. It's not a loss leader. It's a premium product. Lucas: Right. And they're disciplined about not over-discounting. They run occasional promotions, but the core price is stable. That's important for a subscription business — if you train people to only pay on sale, you destroy your long-term revenue. Luna: There's another angle I find interesting: the Times is also building a moat in advertising. Their digital ad revenue grew 8 percent in 2025, even as the broader ad market was flat. That's partly because of first-party data from subscribers. Lucas: Yes. Because they have direct relationships with subscribers, they can offer advertisers very targeted audiences without relying on third-party cookies. That's increasingly valuable as privacy regulations tighten. So the subscription business actually strengthens the ad business. Luna: So the moat is multi-layered: content breadth, habit formation, brand trust, first-party data, and a willingness to invest in quality. That's hard to replicate. Lucas: If today's episode was useful to you — and I hope it was — the way these conversations stay ad-free is listener support. If you'd like to help keep the show going, you can buy us a coffee at buy me a coffee dot com slash fexingo. It's that simple. Luna: Yeah, completely optional, but every bit helps us keep putting out episodes like this one. And we really appreciate it. Lucas: Now back to the moat. One risk I haven't mentioned is subscriber fatigue from the bundle itself. If you bundle too many products, you risk diluting the core value. The Times has been careful to keep the bundle tight — they haven't added a music service or a video streaming product, for example. Luna: That's a good point. They've resisted the temptation to become a super-app. They stay focused on what they do best: text-based journalism, games, recipes, and reviews. Lucas: Exactly. And that focus is part of the moat. The Times doesn't try to be everything to everyone. It knows its identity. And it's willing to say no. Luna: So what's the takeaway for someone building a subscription business today? Is it 'bundle, bundle, bundle'? Lucas: Not exactly. The takeaway is: build products that are habit-forming, bundle them in a way that increases switching costs, price them with discipline, and invest in the core value that makes the subscription worth paying for. For the Times, that core is journalism. For your business, it might be something else. But the principles are the same. Luna: And don't forget to start with a product that people actually want. The Times had a 170-year head start on that. Lucas: True. But even without that, you can apply the same logic. Start with one great product, prove it, then expand carefully. That's the Times playbook. Luna: Alright, I think that's a solid note to end on. Next episode, we're looking at how a completely different industry built a moat. Any hints? Lucas: Let's just say it involves something you probably have in your kitchen.