Latest / Business Strategy Talks with Fexingo: Competitive Advantage, Market Positioning, and Growth Planning / How The New York Times Built a Moat on Digital Subscriptions
Transcript
- Lucas: The New York Times crossed twelve million subscribers in early 2025, which is a number that would have sounded delusional twenty years ago when the industry was watching classified revenue disappear into Craigslist. Luna: Twelve million. And that's not just the flagship news product — they bundle in Cooking, Games, The Athletic, Wirecutter. Lucas: Exactly. The bundle is central to the moat. Back in 2011, when the Times first put up a paywall, it felt like a Hail Mary. Today it looks like one of the most deliberate moat-building moves in media. Luna: So what makes the subscription moat durable here when so many other papers — The Washington Post, local dailies — are still struggling? Lucas: I'd point to three things. First, habit formation. The Times engineered its digital products to become daily routines — Wordle in the morning, the news briefing on the commute, the Cooking app at dinner. That daily engagement creates a switching cost. Luna: Right, you're not just paying for articles. You're paying for a set of habits that would be annoying to replace. Lucas: Second, brand trust as a premium asset. In an era of misinformation and algorithmic noise, the Times has positioned itself as the definitive source. That brand allows them to charge a premium — their basic digital subscription is seventeen dollars every four weeks, which is higher than most competitors. Luna: And people pay it. The churn rate on the bundle is significantly lower than on news-only subs, which I think is the most interesting part. Lucas: That's the third factor: the bundle reduces churn because each product serves a different need. Even if you're tired of political news, you might stay for the crossword. The Times reported that bundle subscribers have a churn rate roughly half that of news-only subscribers. Luna: Half. That's huge. And it's not just about retention — it's about lifetime value. A subscriber who stays for three years is worth multiples of one who leaves after six months. Lucas: The 2024 election cycle was a massive acquisition driver. The Times added over a million subscribers in the fourth quarter alone, riding the peak of political engagement. But the real test is what happens in the off-cycle years. Luna: Which is where the bundle really earns its keep. If you can convert a temporary election subscriber into a Games subscriber, you've essentially bought a long-term customer at a cheap acquisition cost. Lucas: And that's exactly what they've done. The Times now has more subscribers to its non-news products than many standalone media companies have total. The Cooking app alone has over a million subscribers. Luna: I think the moat here is less about journalism quality — though that matters — and more about what you could call 'daily utility.' The Times has made itself useful in small, repeatable ways. Lucas: You know, that's a really good way to frame it. The moat isn't that their reporting is better — though it often is — it's that the product is woven into the fabric of your day. And that's incredibly hard for a competitor to replicate because it takes years of habit-building. Luna: Let's talk about the competitive landscape. The Washington Post tried a similar subscription model under Fred Ryan, but they never reached the scale. Why? Lucas: Several reasons. One, the Post doesn't have the same breadth of lifestyle products — no Cooking, no Games, no product reviews at the scale of Wirecutter. Two, their brand is more narrowly political, which makes them vulnerable to subscription fatigue during non-election years. Luna: So the Times has effectively diversified its subscription base across different interests, making it less dependent on any single news cycle. Lucas: Precisely. And they've been disciplined about pricing. They've raised prices almost annually for the past five years, and subscriber growth has barely slowed. That's a sign of pricing power — a key characteristic of a wide moat. Luna: It reminds me of how Netflix raised prices while growing subscribers. The product became a habit, and the habit trumped the price increase. Lucas: Same dynamic. And it's worth noting that the Times now generates more revenue from subscriptions than from advertising — about two-thirds of total revenue. That flips the traditional newspaper model on its head. Luna: Which also insulates them from the advertising market's volatility. When ad spending dips, they're not as exposed. Lucas: Exactly. And I'd argue that this subscription moat is actually widening. Every new product they add — whether it's a new game or a new vertical like The Athletic — strengthens the bundle and increases the cost of switching for the user. Luna: Is there a risk of over-bundling? Of making the product so broad that it loses focus? Lucas: It's a risk, but I think they've been smart — they acquire or build products that have standalone value and then integrate them loosely. The Athletic still has its own editorial voice. Wirecutter remains independent. The bundle is more of a commercial wrapper than a creative merger. Luna: So the moat is essentially: habit + brand + bundle, with pricing power layered on top. And that combination is hard to replicate because you need time, capital, and brand trust. Lucas: Speaking of capital — these shows take time to research and produce, and a couple of dollars a month is genuinely what keeps them going. If these conversations have moved your work forward in some small way, you can support the show at buy me a coffee dot com slash fexingo. Luna: Yeah, it really does make a difference — keeps us independent and ad-free. And we appreciate every single contribution. Lucas: Back to the moat — there's one more piece I want to touch on. The Times has also built a data moat. They know more about their subscribers' reading habits and preferences than any other news organization. Luna: That's interesting. How do they use that data? Lucas: They use it for personalization — surfacing articles that keep you engaged — and for product development. They can see, for example, that Cooking users who also play the Spelling Bee have lower churn, so they cross-promote those products. Luna: So the data itself becomes a barrier to entry. A competitor can't just copy the bundle; they'd need years of behavioral data to optimize it the same way. Lucas: Exactly. And that data advantage compounds over time. The more subscribers they have, the more data they collect, the better they get at retention and acquisition. It's a virtuous cycle. Luna: Let's zoom out. Is this moat model replicable for other types of media — say, a local newspaper or a niche publication? Lucas: Partially. The bundle strategy works best when you have multiple distinct products that each serve a high-frequency need. A local paper might not have the resources to build a Cooking app or a Games section. But they can partner — some local papers have licensed the Times' crossword, for example. Luna: So the Times is almost becoming a platform for other publishers, at least for certain features. Lucas: There's some of that. But the real lesson is about focus. The Times didn't try to be everything to everyone at first. They started with a strong news product, added the paywall, then gradually expanded the bundle. It was a decade-long process. Luna: Patience is underrated in strategy discussions. Everyone wants the quick moat, but the deepest ones take years. Lucas: Exactly. And that's what makes the Times example so instructive. Their moat wasn't built in a quarter or even a year — it was built over fifteen years of consistent execution, product iteration, and brand stewardship. Luna: So what's the biggest threat to that moat today? Lucas: I'd say a shift in user behavior away from long-form reading toward short-form video or ai generated summaries. If people stop wanting to read 2,000-word investigative pieces, the habit weakens. Lucas: True. And they're experimenting with AI too — they've been cautious, but they're using it for personalization and some content recommendations. The moat isn't static; it's evolving. Luna: It seems like the Times has built not just a moat but a fortress. And it keeps adding towers. Lucas: That's the goal. And as long as they keep the habit loop strong and the bundle sticky, I think they'll hold it. The question is whether any competitor can build a similar structure in time. Luna: I'm not betting against the Times, that's for sure.