Commentary

'New York Times' 15-Year Stock High Reflects Subscription Gold Mine

Shares of New York Times Co. hit a 15-year high on Thursday after the publisher reported strong growth in digital subscriptions that helped to offset declining advertising revenue.

The results again highlight how some publishers are adapting their businesses for the digital age amid heightened competition for ad dollars.

The NYT even plans to raise its digital subscription price by 13%, as Publishers Daily reported this week. That price hike reflects management's confidence that readers can afford to shell out an extra $25 to $30 a year for access to its website.

As publishers grapple with declining ad revenue, the NYTprovides several important lessons on developing a strategy for the digital age. Publishers have worked to find the right mix of website traffic that supports ad sales, and paywalls that limit pageviews while providing reader revenue.

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People willing to pay for a subscription demonstrate a greater commitment to the publication. Publishers can make a strong case that those readers are more engaged with the publication — and more likely to recall advertising they see online.

Facebook once described the consumption of third-party content in its news feed as a more passive experience than interacting with friends and family on its social network. That led the company to diminish publisher content on its platform a few years ago, killing off traffic to lots of publishers.

But it's important to consider that reading news and information from publishers is highly engaging. Content will remain king — explaining why tech companies like Apple are shelling out billions for exclusive content to help differentiate their gadgets from rivals. Facebook is building out a news section to aggregate publisher content.

For smaller publishers like local newspapers, their key advantage is providing original reporting that's meaningful to their communities. National news can be found anywhere, but local reporting can be more exclusive.

And people are willing to pay for news, as the NYT has demonstrated.

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