Ben Gilbert: evaluation

Transcript context

…Exactly. But the jury is still out about will this work in a digital environment. As we’ve discussed, while there are some monopoly-like factors here and that nobody else has a journalistic organization like The Times, or the number of journalists, or the reach, or the content that they’re producing. It’s not a geographic monopoly like the old school newspaper business where you’re either getting The Times or you’re getting no news. There are other places everyone can go on the Internet. For sure. Another bear case to make because in my bull case, I started painting of why this is an even better business than Netflix. The Times has 7½ million paying subscribers. Netflix has 200 million paying subscribers. The Times estimates that their total addressable market is half of Netflix’s current subscriber base. Just to contextualize that, I think The New York Times’ current average revenue per subscriber is right around the same ballpark, $15–$17 a month of Netflix. It's an interesting comp because from a revenue perspective or from a subscription price perspective, they're very comparable, but The Times estimates that its addressable market is half of Netflix's current market. When you're thinking on the scale of the Fang-type companies, The New York Times is never going to be that. Not that they aspire to be that, but that is in no way the scale that we're talking about here, even though they have the tech company co-structure dynamics that they're shifting to. The next bear case (I think) that's a reasonable one to paint—this is the classic Ben Thompson point—is there's a conflict here between their business model and their stated mission. If you're really going to be the paper of record and you're really going to be the paper for everyone, the authoritative source, your business model actually should not be to get a small number of people to subscribe to you. It should be to get your content to the largest number of people in America, in the world and not limit your reach at all by your business model. The argument that if you were a bear, you would make here subscriptions are for niche providers. You should be figuring out how to run a successful advertising-based, open publication for the Internet if what you really want to do is be the neutral paper of record, because what you're doing creates an incentive for you to create strong affinity with a certain group. Whether that group is liberal subscribers, or people who don't like the president, or whoever you think they've attracted over the last few years, The New York Times without a doubt in this business model has every incentive in the world to identify a large niche and create high affinity among that niche. That may not necessarily align exactly with pure journalistic neutrality. Super interesting. I forgot to include in the history and facts The New York Times as the paper of record. That saying and quote actually comes from a very specific business strategy from The Times. They added the Index to The Times that they published I believe quarterly, I think in the 19-teens. The Index was literally an index of every topic, person, and institution that appeared in The Times over the past quarter. The reason they started doing and they invested in doing it was so that librarians and researchers around the world would start using The Times as their main news source because it had this index. Then they would get into schools. That's where the paper of record idea comes from. Actually, it may be sort of a counter. They were specifically trying to target a niche group of we're going to get into the elites of researchers and academics and schools but it's interesting.…

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