Why the New York Times Is Praying for More Trump Outrage

The headlines about the New York Times’ financial results on Wednesday were all about a record number of new digital signups, a gain that pushed the paper over the 2 million mark. But beneath the euphoria lurks a darker fact, which is that print revenue continues to drop at a precipitous rate.

This has been the yin and yang of the Grey Lady’s results for the past several quarters. A steady increase in digital subscriptions, driven by what many believe is concern about President Donald Trump—a phenomenon colloquially referred to as a “Trump bump”—combined with the ongoing free-fall in print-advertising revenue.

The only upside of this collapse in print revenue is that it means print is becoming a smaller and smaller proportion of the newspaper’s business, so the pain is gradually decreasing.

Last year, print advertising revenue at the Times dropped by 9% in the first quarter, 14% in the second, 19% in the third and 20% in the fourth. It fell by another 18% in the most recent quarter. Despite those declines, however, print still accounts for almost two-thirds of the paper’s advertising revenue. And it likely has further to fall.

On the bright side, digital revenue is climbing rapidly. The latest numbers show that digital ads and digital subscriptions—combined with income from affiliate revenues generated by The Wirecutter, the product-recommendation site the Times bought last year—pulled in $126 million in revenue. That’s up by $32 million or about 30% from last year.

Print advertising, meanwhile, dropped by roughly $18 million in the latest quarter to $80 million, down about 18% from the same quarter of 2016. What that means is the Times made significantly more from digital than it lost from print, which is a good sign.

In the past, even the paper’s digital revenue growth was not compensating for the rapid decline of print ad revenue. But as print ads become a smaller and smaller proportion of the company’s overall business, it is easier for digital growth to make up the gap. All the Times needs to do now is ensure that digital subscriptions continue to increase at the same rate.

Even with those increases, print as a whole still accounts for a much larger proportion of the Times’ business than digital does. If you include print subscriptions and print ads, print-related revenue was $240 million in the latest quarter, or almost twice what digital brought in.

In other words, the paper isn’t just relying on print advertising, it’s also counting on the fact that subscriptions to the print version will continue to bring in a significant amount of money. But is that a winning bet?

On the subscription side, digital signups accounted for $76 million in the latest quarter, but circulation revenues overall were $242 million, which means that print subscriptions accounted for more than twice as much revenue as digital subscriptions did.

The Times has been cranking up the price of its print edition over the past few years to try and keep those circulation revenues flowing, but eventually that is likely to stop working as well as it has been. And if the pace of digital subscriptions starts to slow down as well, that could make it even harder to compensate for print’s ongoing decline.

In the last quarter, the company’s revenue rose by $20 million — it lost about $10 million in revenue from advertising, but gained about $30 million from circulation increases ($25 million) and other income ($5 million).

Total digital revenue was $123 million in the quarter, up by about $29 million or almost 30% from the same quarter a year earlier. Total print revenue was $240 million, or about 60% of the total $398 million.

Circulation revenue from digital subscriptions (minus the crossword) rose by 40% or about $24 million to $76 million, while circulation revenue as a whole was $242 million, meaning print circulation revenue was $166 million.

Digital ad revenue was $50 million, up about 19% or roughly $8 million. Print ad revenue fell by 18% or about $17.5 million to about $80 million. Ad revenue as a whole was $130 million, down by about 7%.

Here’s Why Facebook Investors Are Nervous, Despite Blockbuster Results

The gigantic advertising machine known as Facebook continued to fire on all cylinders in the most recent quarter, beating analysts’ revenue and profit estimates handily.

So then why did the company’s share price [fortune-stock symbol=”FB”] weaken by 2% in after-hours trading Wednesday, despite this dramatic over-performance? In a nutshell, investors are likely nervous about the future, after Facebook warned that its advertising revenue growth rate is likely to slow later this year, and its costs are likely to rise.

The social-networking giant’s stock has also climbed by more than 15% in just the past three months, driven in part by strong results, so some of the weakness could be profit-taking.

There was certainly nothing to complain about in Facebook’s posted numbers. Revenue in the first quarter climbed by 49% to $8 billion, which was higher than expected, and net income was $3 billion or $1.04 per share, significantly higher than consensus estimates of 87 cents.

The company also announced that it now has close to 2 billion monthly active users — 1.94 billion, to be exact — up from 1.86 billion in the prior quarter. It has 1.28 billion daily users.

A company that has annual revenues of almost $30 billion but is still growing at almost 50% per quarter is almost unheard of. But it also raises the possibility that this phenomenal growth will begin to slow down, and that’s likely what investors are spooked about.

Facebook said in its last quarterly update that it expects to see its advertising growth rate “come down meaningfully” in 2017, as it starts to throttle the amount of advertising in the news feed.

Over the past few years, the social network has been able to boost its revenues by increasing what it calls the “ad load,” or the proportion of ads in a user’s feed. But the company said it is reaching the upper limits of what it can put in the feed without seeing a backlash.

Growth looked to be humming along just fine in the most recent quarter: Ad revenue climbed by 51%, which is roughly equivalent to the growth that Facebook saw in the previous quarter.

However, company officials repeated their earlier warning, saying they expect ad revenue to “come down meaningfully” by the middle of the year, along with the ad load. In addition, Facebook also said that its costs are likely to increase by more than 50% in the next quarter, as it makes a number of investments in what it called “significant initiatives.”

Among those initiatives is a major investment in hiring moderators to police the site’s live videos and other content for offensive or disturbing material, after a number of high-profile incidents in which people have committed suicide and engaged in other acts of violence.

Facebook CEO Mark Zuckerberg announced Wednesday that the company is hiring 3,000 moderators who will review content, to add to the 4,500 or so it has doing that job currently.

Here are the key numbers from Facebook’s Q1:

Revenue: $8.03 billion vs. $7.83 billion expected.
Monthly active users: 1.94 billion, up from 1.86 billion last quarter.
Daily active users: 1.28 billion, up from 1.23 billion last quarter.

Facebook earnings: $1.04 per share vs 87 cents expected

Daily active users (DAUs) – DAUs were 1.28 billion on average for March 2017 , an increase of 18% year-over-year. • Monthly active users (MAUs) – MAUs were 1.94 billion as of March 31, 2017 , an increase of 17% year-over-year. • Mobile advertising revenue – Mobile advertising revenue represented approximately 85% of advertising revenue for the first quarter
of 2017 , up from approximately 82% of advertising revenue in the first quarter of 2016

1.3B a day, Mark says — talked about next focus is building community, lot to do, bigger than any one org, develop social infrastructure for engagement… millions of smaller communities… more than 100 million people members of important groups like parenting, meaningful groups — want more than a billion people to join these kinds of groups… launched fund-raising tools… continue building new tools to keep people safe, adding 3,000 people to add to 4,500 we have already, to review content… changes to the news feed to reduce financial motivation to spread hoaxes, more info on whether article is disputed, ways to tell whether something is fake news… launched Town Hall in March, created more than a million new connections with local representatives… swipe right to access the camera, computer vision tools for filters etc., make camera the first augmented reality device… excited to keep pushing augmented reality forward; 200M daily active Instagram Stories users, 175M daily users of WhatsApp “status” (like stories) will keep putting videos at the center of all these services (news feed, WhatsApp and Instagram); daily watch time has increased by four times… 1.2B people use Messenger every month;

Ad rate will come down meaningfully, ad load will come down mid-year, full year 2017 payments revenue will decline compared to 2016; GAAP expenses will grow 40% to 50%, initiatives that will be positive long-term for society and the company, expenditures will be up over 50%.

Looking to invest in “kickstarting an ecosystem for longer-form video”… revenue-share model…

Here’s Why Some People Are Willing to Pay For the News

As the advertising market continues to be disrupted by the rise of the Google-Facebook duopoly, many publishers are looking to paywalls and subscriptions for survival. A new study shows some reason for optimism, but also plenty of reasons for pessimism.

The research, which was done by the Media Insight Project, found that a little over 50% of U.S. adults currently pay for their news — either by way of subscriptions to traditional publications like newspapers or magazines, or to online media sources, or both.

That’s the good news.

The bad news is that there is another large group of news consumers who are described as “news seekers,” users who are interested in the news and devote a certain amount of time to finding it. But more than half of this group do not pay for their news, either in print or online.

An optimist would see this as an untapped resource for subscriptions, if only a way could be found to charge them for the news they are so interested in. A pessimist, however, would see a group that is successfully getting all the news they need for free, with no intention of paying.

There are some grains of hope for the optimists: Almost 20% of those who don’t currently subscribe to a news source say that they are inclined to do so in the future, if the price was right.


When it comes to those who already subscribe, the reasons for doing so include 1) The fact that the publication is good at covering a topic the reader is interested in, 2) The fact that friends and family also subscribe, and 3) The fact that the outlet provided a discount or (in the case of print newspapers) that it includes coupons that can help a user save money.

Most of the benefit of subscriptions is going to print publications, according to the Media Insight survey. Of those who currently pay for their news, close to 60% describe themselves as primarily print subscribers, compared with less than 30% who are digital.

As for the non-paying crowd, most of the reasons why they don’t pay are fairly obvious. Most of those surveyed said they had no problem finding plenty of free news, while over 40% said they weren’t interested enough in the content to pay. Others said they found subscriptions too expensive, or they were too busy to make use of them.


The Media Insight Project also found that young people — a group that has traditionally been seen as uninterested in paying for content — subscribe to news sources at a higher rate than many people assumed. Almost 40% of adults between the ages of 18 and 34 said that they subscribe to a news outlet, and said they did so because they wanted to support the organization’s mission.

This raises the possibility that news publishers who can successfully connect with younger users may be able to convince a significant number of them to begin paying for their content, provided they see the organization’s overall mission as worthwhile.

As the study put it, “publishers must understand that these relationships begin through friends’ referrals and social media,” and that in order for younger audiences to be willing to pay a subscription for their news, “they must bond with your mission and purpose.”

Interestingly enough, the Media Insight survey says there is some evidence that publishers could get away with charging more than they do now. Only 1% of those who pay say they think their subscription is too expensive for what they get, and 48% of digital subscribers say they feel they are getting a “very good value” for the money.

The Media Insight Project is a joint venture between the American Press Institute and the Associated Press NORC Center for Public Affairs Research. The study surveyed more than 2,100 adults in the U.S. who were randomly selected from a panel of U.S. households.

Twitter Is Trying to Become TV, But So Is Everyone Else

Twitter has talked for some time about wanting to be the go-to destination for streaming video, and on Monday it put its money where its mouth is, by announcing deals with more than a dozen publishers and content companies, from Bloomberg to the NFL.

Although Twitter is undoubtedly hoping that all of this proprietary content will help to pull in new users — not to mention retaining the users it already has — the primary goal of its video strategy is boosting advertising revenue.

Video ads can be extremely lucrative, and Twitter needs all the help it can get in the revenue department, since its revenue actually fell last quarter for the first time.

All of this means that Twitter is extremely motivated when it comes to making its video push successful. Unfortunately for the company, everyone else is also chasing those juicy video ad dollars, including deep-pocketed behemoths like Facebook and Amazon.

Facebook, for example, is not only paying media companies to produce live video content, it has set up a division that is financing, licensing and creating live TV-style programming. And it dwarfs Twitter both in terms of the size of its user base and its ability to spend.

In all, Twitter announced streaming deals with 16 content providers on Monday, most of which fall into the category of either news or sports.

On the news side, Bloomberg will provide a 24/7 channel of custom content, including verified videos from Twitter users, and there are shows from BuzzFeed, The Verge and Cheddar, a financial-news startup run by former BuzzFeed president Jon Steinberg.

When it comes to sports, Twitter announced deals to carry streaming content from the WNBA, Major League Baseball and the PGA Tour, as well as a live show produced by The Players Tribune, a site co-founded by former baseball star Derek Jeter. The company also signed a partnership with concert producer LiveNation to stream some of its events, and a deal with Viacom for MTV content.

Twitter also has a deal with the NFL, but the details of that arrangement illustrate some of the challenges the company faces as it tries to pivot to become a digital television platform.

The network still has a deal with the football league, but it no longer includes the right to show actual games. Twitter had the rights to Thursday games last year — for which it paid an estimated $10 million — but it was outbid this year by Amazon, which paid five times what Twitter did.

What Twitter has now is the right to show pre-game and/or post-game content that will be produced by the NFL. In other words, commentary, highlights, etc.

When it comes to the WNBA and MLB and the NFL, Twitter has the rights to stream actual games. But is that going to be enough of a draw for a significant number of users? That’s unclear. But even having the rights to Thursday night NFL games last year didn’t seem to generate much bang for Twitter, either in the user-growth or revenue department.

The bottom line is that Twitter’s push into live video means it is becoming a media company, or at least it is trying to. And that is problematic for a number of reasons.

Social networks in general get free content from their users, and then try to sell advertising and other services related to that. Media companies, however, have to either create or cut deals with other publishers for their content, and then sell advertising around it.

The biggest problem is that this strategy can be expensive, at least if you want to get the really good content, like live NFL games. That’s why media companies tend to be valued much lower on the stock market than technology companies are. And Twitter simply doesn’t have the financial means to compete with players like Facebook and Amazon and YouTube.

That’s not to say there won’t be some good content coming from Bloomberg or BuzzFeed or Cheddar in the shows and segments they produce for Twitter. And there will probably be advertisers who want to sign up to reach some of those users. The company has already announced Wendy’s as an initial sponsors, and said it hopes to announce more soon.

What’s unclear, however, is how much Twitter is giving up in return for these deals, versus how much it stands to make from ads. And therein lies the difference between profitability and failure.

To be fair, the company didn’t really have much choice but to double down on live video. It admitted in its most recent quarterly earnings update that many of its previous advertising strategies (promoted tweets, etc.) were not working, and a number of them have been shut down, which is why its revenue dropped by 8%.

What remains to be seen is how many Twitter users want to actually watch live video news and sports programming through the app, and whether Twitter can convince advertisers that those users are worth paying for in enough quantity to move the needle for the company revenue-wise. It’s not easy being a media company.

About.com Reinvents Itself, Changes Name to DotDash

Most of the iconic names from the history of the early web, sites like Geocities and Pets.com, have long since ceased to exist. But About.com, one of the earliest digital “content farms,” has remained largely unchanged despite the turmoil all around it.

All of that is coming to an end, however. In a recent interview with Fortune, About.com CEO Neil Vogel described how the site is reinventing itself for the current media age, and also unveiled a new name. About.com will now be known as DotDash, and its strategy is to be a kind of digital-first Conde Nast, running a series of content verticals.

The company has spent the last six months launching several new sites, including VeryWell—which focuses on health—and Balance, which specializes in articles about personal finance.

Vogel says he became the CEO of About after it was acquired in 2012 by Barry Diller’s IAC (which owns a host of sites like Match.com and Ask.com), and it was immediately apparent that the previous owner—the New York Times, which bought it in 2005—had not really invested in the site.

“When IAC bought it, it was still getting about 100 million users a month, and it had a bunch of revenue, but it was about half the size it was at its peak,” Vogel said. “It had not been invested in by the Times at all — no one had touched the content or the technology since like 2006.”

The site was so ugly and poorly designed, Vogel says, that “I couldn’t figure out why it was still in business when IAC approached me and asked me to fix it.”

The more he dug into the business of the site, however, the more Vogel says he realized that the “evergreen” type of content that About specialized in—articles about how to fix your broken toilet, or how to identify chicken pox, etc.—continued to draw a lot search traffic from Google.

“The content was still incredibly good, because a lot of it was written by experts,” he says. “We had 60 MDs that wrote for us, we had travel stuff that was written by people who lived in these places, dozens of personal finance experts. I figured if we could fix the tech and the look, we might get something advertisers might want to advertise on.”

Over the next year, the company totally rewrote the code that powered the site, did a top-to-bottom redesign of the front end, and launched a new version. “That more or less stopped the decline,” says Vogel. “All of a sudden people weren’t embarrassed to say they worked here.”

While traffic and revenue stopped falling, however, they didn’t start growing. “It turned out we were just doing the wrong thing better,” he says. “We were the same as Yahoo or MSN: A big portal with lots of general-interest content. But there’s no place for a site like that in 2016.”

Advertisers also saw About.com as a damaged brand, in part because it hadn’t changed for years. “We kept losing out on these deals because advertisers just couldn’t bring themselves to put their brands next to ours,” Vogel says. “At one point, we had one of the biggest companies in the world tell us never to call them again.”

The conclusion he came to was that if the site wanted to do anything other than tread water, it would need to be reinvented. “It was profitable, but it was going sideways,” he says. “We told IAC that we could keep it going and it would be fine, or we could really try to blow it up.”

IAC gave the order to blow it up, so Vogel and his team went through all of the content on the site and found that the most successful pages fell into five general categories: Health, technology, personal finance, lifestyle and travel.

“So we figured we could take those five areas and build brands around them, and turn that into something worthwhile, and the rest of the content we would just throw in the garbage,” Vogel says.

The transformation began at the beginning of 2016, and the first brand, VeryWell, was launched in April. Content was updated to make it current, and the idea was to be “a kinder, gentler version of WebMD,” the About.com CEO says. The site got 12 million unique visitors a month when it launched, and it is now at around 17 million visitors.

The second vertical, a personal-finance site called Balance, launched with 6.5 million unique visitors in August and last month it had more than twice as many, said Vogel.

Lifewire, the personal-technology site, launched in November and has gone from about 3.5 million unique visitors a month to more than 7 million. A home and food site called The Spruce is up about 40% since launch, and the next on the list is a vertical oriented around travel called TripSavvy, which is launching later this month.

As for the new name, Vogel said the word Dot in DotDash came from the fact that About.com’s logo had a red dot for the period, and the company wanted to maintain some connection to that. The word Dash seemed symbolic of “something coming next,” he says. And he also liked the fact that “dot dash” in Morse code refers to the letter A.

The response from advertisers seems to show the new approach is working, says Vogel. “We’ve been talking to people who have not talked to us since I’ve been here, which is four years,” he said. “Advertisers want data, which we’ve always had, but now we have brands that advertisers can trust.”

Embargo May 2 — Been here four years, IAC bought About from the Times, was still 100M users a month, bunch of revenue, good news lot of scale but bad news half the size at its peak — not been invested in by the Times at all, in 2013 no one had touched the content or the tech since like 2006 — create evergreen content, get SEO from Google and monetize through AdSense… so ugly and such a mess, IAC approached me and asked me to fix it, couldn’t figure out why it was still in business; but if you dug into it, the content was still incredibly good, written by experts, 60 MDs that wrote for us, went through each of our verticals, travel stuff written by people who lived in these places… dozens of finance experts; figured if we could fix the tech and the look, might get something advertisers might want to advertise on — rewrote the code, rebuilt the front end, launched a new version, that more or less stopped the decline — first year were still going down fairly rapidly, traffic and revenue… all of sudden people weren’t embarrassed to say they worked here; spent a year, just could not get it to grow no matter what we did — turned out we were just doing the wrong thing better, same as Yahoo or MSN, big portal with lots of content; there’s no place for a general-interest website in 2016 that is going to appeal to either users or algorithms that send traffic… if you have a clogged toilet, are you going to trust About.com or HGTV? Didn’t have any trust in our brand — some advertisers liked us, but kept losing these deals with The Verge and Engadget because they just couldn’t bring themselves to put their brand next to ours; one of the biggest co’s in the world told us never to call them again… About pre-dates Google, the deal back then was people would come see you directly; we became dependent on Google, but as it became more sophisticated it became more discriminating — same with Facebook; did pretty well with Pinterest because it’s very visual but… conclusion we came to was this thing is fine, it’s profitable, but it’s going sideways; we told IAC that we could keep it going and it would be fine, or we can really try to blow it up — figured out most of our content was focused on health, tech, personal finance and lifestyle; we thought if we took those five areas and built brands around them, we could turn that into something worthwhile, and then throw the rest of the content into the garbage… we don’t have magazine content to preserve, we don’t have existing businesses, so we can change quickly if we need to; middle of 2015 had the idea, started in beginning of 2016, broke it up, drop them into new domains… real branded, premium publisher; launched first brand in end of April last year, VeryWell; repurposing of all health content, brand new domain, average age of content four years, we updated all of it; kinder, gentler version of WebMD; 30-45 days later, traffic down 45-50% — figured that would happen because had to retrain Google, Facebook, etc.; 12M at launch, now 17M… Balance, personal finance; 6.5M in August, last month 13.5M, more than doubled; launched Lifewire tech site (how to fix my router) in November, gone from less than 3.5M to 7M — then home and food site The Spruce, up 30-40% — TripSavvy launching in three weeks… other big news is we’re going to change the name of About.com, no longer a general-interest UGC site; new name DotDash — always been a red dot in the name of About, so kept that, the dash is symbolic of something coming next; dot-dash is the letter A in Morse Code, which we thought was kind of fun… trade brand, not consumer brand, more like CondeNast or Hearst, so when we sell across brands; we’ve been talking to people who have not talked to us since I’ve been here, which is four years… advertisers want data, which we’ve always had, but now we have brands that advertisers can trust;

Here’s What’s Interesting About That Twitter-Bloomberg Video Deal

As part of an increasing focus on video, Twitter has said it is looking for deals that will allow it to stream various kinds of content on the network 24/7, and on Monday it announced its first partner in that effort: Financial news giant Bloomberg LP.

This isn’t the first time the two companies have joined forces on streaming video. Twitter also partnered with Bloomberg to broadcast live coverage of the U.S. presidential debates in September, which came after an earlier deal to stream several of the media company’s shows. But Monday’s arrangement goes much deeper.

Instead of just coverage of one event, the partnership will see Bloomberg providing 24 hours of content a day to stream via Twitter, seven days a week.


“It is going to be focused on the most important news for an intelligent audience around the globe and it’s going to be broader in focus than our existing network,” Bloomberg Media CEO Justin Smith told the Wall Street Journal in advance of the official announcement, which was made at Twitter’s “new front” event for advertisers.

Smith’s comment gets at one of the most interesting things about the news: Namely, that this is not going to be just a re-broadcast of existing content from Bloomberg’s various channels and shows.

As more than one media watcher pointed out when the story broke, Bloomberg already streams its content through a variety of services and networks, including on YouTube and pretty much every other over-the-top alternative. It can afford to do so because it doesn’t have to rely on traditional cable distribution contracts for its livelihood.

By contrast, what Twitter will be getting from Bloomberg is original content (it’s not clear how much) that will be created by the media giant’s various bureaus and reporters around the world. Smith said the channel doesn’t have a name, but will begin streaming in the fall.


The other interesting aspect of the new channel/network is what else it will include. According to the Journal, in addition to custom content from Bloomberg, the new service will have “a curated and verified mix of video posted on Twitter by the social-media platform’s users.”

It’s not clear who will be doing the curating and verifying of the video that appears on the new channel. But it plays into some of the work that Twitter has been trying to do with features like Moments and an expanded “Discover” tab, both of which are aimed at curating content from the network to show to users who might be pressed for time.

News Corp.’s Storyful unit also curates and verifies user-generated video from Twitter and other networks, but it does so as a paid service for media clients.

When it comes to streaming video about business and technology, meanwhile, there is already a video startup that does this for Twitter (among other outlets). Cheddar was launched by former BuzzFeed president Jon Steinberg last year as a kind of CNBC for millennials.

Having a multi-billion-dollar competitor like Bloomberg enter your market might fill some with trepidation, but Steinberg said he sees the new partnership as a good thing because it will bring more quality streaming-video content to Twitter, and that will grow the pie for everyone.


Bloomberg and Twitter declined to share any details about the financial arrangement behind their partnership. The new channel will be supported by advertising, according to the announcement, but it’s not clear how the revenues from those ads will be shared between the two.

For Twitter, such a partnership would likely be a positive thing even if no money changed hands. The company has been pushing its status as a home for live video with deals like the one that saw it stream NFL Thursday night games last year (a deal Amazon recently took over), and having a heavyweight like Bloomberg involved will likely help. The stock jumped about 5% on the news.

The announcement also sparked speculation about whether the partnership might lead to a deeper relationship between the two companies—in other words, an acquisition of Twitter by Bloomberg.

There are some synergies that might be achieved from such a combination, including the addition of social features for Bloomberg, which has been behind the curve on such things for some time. But it’s not clear that they would be worth the $15 billion the financial-media giant would likely have to pay to acquire Twitter outright.