Hot on the heels of the New York Times’ $25 million acquisition of Serial Productions and an alliance with This American Life that will see the paper begin selling the show’s ads beginning in 2021, executives say podcasting and other audio products will continue to play a larger role in what the company offers beyond its top-ranked morning news podcast The Daily.
“We’ve got really big ambitions for audio journalism and for what the Times can do with audio particularly now that we have the triple threat of The Daily, Serial Productions and a new partnership with This American Life,” said COO Meredith Kopit Levien. “You can expect to see us continue to invest in audio for a number of reasons.” Levien, who ascends to chief executive next month, told analysts on a conference call Wednesday that audio is embraced as a revenue driver while the Times’ efforts in television and film are viewed more as ways to promote the paper’s journalism and connect people with the brand.
As it grows its podcast catalog, some analysts have begun to wonder whether the Times itself could become an aggregator, which could deliver better financial return. But Levien said she does not see the Times going head-to-head with apps like Apple Podcasts, iHeartRadio or Spotify.
“We really believe in the power of the New York Times being a destination in people coming to directly, and at the same time we are very conscious of the fact that we operate in a broader ecosystem and in many cases habits are formed based on some of the biggest players in that ecosystem,” said Levien. “In the audio space it’s not clear yet what a destination is. The Daily, which is a program, is a destination. It, in of itself, is a destination that people ask for by name and come to every day, and it’s a distribution channel for us to launch other great work into the world.”
The Daily now has more than 3.5 million average downloads for the podcast, which is nearly twice what it had a year ago. Levien said it demonstrates the “resilience” of the podcast during the stay-at-home orders during the pandemic.
“The audience is now vastly larger than the audience for the paper, daily or Sunday, at its peak and most of the listeners to The Daily are people who never read the newspaper,” she said. “It’s done an incredible job at widening the audience for the Times. It’s bringing new people to the brand.”
Levien won’t rule out one day making The Daily available only to subscribers of the Times’ website or charging for the show, but there are immediate plans to begin doing so. In the meantime, Levien said it is monetized in other ways. “There’s some evidence that The Daily plays a real role into bringing people into our subscription funnel,” she told analysts. Levien believes the single-story focus of The Daily often leaves listeners wanting more on a story, and that sends them to the Times’ website. “We know that people who listen to The Daily feel real affinity for our brand,” she said. “And The Daily is a really important distribution method for other audio journalism. We use it as an envelope to send other new podcasts into the world and that’s been quite effective.”
During the second quarter digital revenue at the Times exceeded print revenue for the first time in the company’s history. The company reported $185.5 million in revenue from digital ads and subscriptions during the second quarter, ahead of the print revenue of $175.4 million.
“It is clearly a watershed moment in the transformation of the New York Times. In revenue now, as in everything else, we are a digital-first company and won’t look back from here,” said CEO Mark Thompson.
The Times said its total ad revenue during the second quarter declined 44% to $67.8 million.
The Times did not release podcast-specific revenue, but it said second-quarter digital advertising revenue decreased 32% percent while print advertising revenue was down 55%. And the company said digital advertising now makes up 58% of its total ad revenue. Third-quarter revenue is expected to be down, with digital ad dollars estimated to be off by 20% compared with a year ago, largely due to the impact from the COVID-19 pandemic.
The quarter was the last for Thompson, who announced he is leaving the Times. The former director general of the British Broadcasting Corporation will be succeeded by Levien beginning Sept. 8. She has been with the company since 2013.