India important for New York Times, visiting to understand it better: CEO

We are not tying up with anyone in India, nor are we looking at distribution or investment, says CEO Mark Thompson

What do you ask the chief executive of a newspaper company that is routinely called names by the President of the US? But the ‘failing’ The New York Times Company (NYT) has never been in better shape. Just over a billion dollars of its $1.75-billion top line (FY18) comes from subscription; 40 per cent of this is digital. It has roughly 5 million subscribers, 3.2 million of them digital. It hired 1,700 journalists at a time when the rest of the US newspaper industry has been shrinking. Mark Thompson joined NYT from the BBC in 2012 and is credited with its turnaround. On an India visit this week, he spoke to Vanita Kohli-Khandekar. Edited excerpts:

What is the India trip about? Is there a tie-up in the offing?

We are not tying up with anyone, nor are we looking at distribution or investment. In many markets outside the US, the NYT is becoming well known. India is an important market. It is a potentially good market for journalism. We are here to meet people and understand the market better and think about what we should do.

Would a recent proposal to cap foreign investment in online news at 26 per cent deter you? Would you look for a partner?

Finding an Indian partner is not our main strategic thesis, and I would say the same thing about Australia or Germany. I don’t rule out marketing alliances but we are certainly not looking at tie-ups. Our model is very simple, we make great journalism, put it on the internet, encourage people to read it and ask for a fair subscription.

But your kind of journalism is possible in countries where the institutional frameworks back freedom of speech. How do you tackle situations where they don’t?

That problem arises in many countries where the freedom of the press is on a spectrum. It may not be fully defended by the courts or by the constitution. In others, like China, the government simply doesn’t accept that journalists have the right to find out the truth and write about it. Wherever we can, we do carry on with our journalism. Our mission is to seek the truth and help people understand the world.

But you are an outlier. The NYT, The Economist, The Guardian have this strong thing of investing in journalism. How much of it has to do with ownership structure?

The (Sulzberger) family trust has a controlling interest in the NYT. And the family is committed to high-quality journalism. We also think it makes good business sense. At the heart of the NYT is a very traditional belief in good journalism. If more news organisations followed our ideas of investing in quality journalism and find an audience, they would be outliers too. Reed (Hastings, co-founder, Netflix), is investing billions of dollars in quality content not out of the goodness of his heart but because good content is good strategy.

Subscription revenues help produce good journalism but limit its reach…

The real problem, most of the world’s media has got, is the historic dependence on advertising. It has more to do with the psychological limitation of thinking that you have to please advertisers and that is the way only way to pay for journalism. Advertising got publishers into the habit of the seasonal expansion and contraction. When the ad market is good they hire journalists and if there is a slowdown they reduce numbers. But what they were facing is not cyclical but a fundamental, secular challenge.

If you were to offer advice to Indian publishers transitioning to digital what would it be?

One, quality works strategically. Two, you can’t run a digital news business as if it was the same as a print or a linear TV business. In the classic news publication, there is an almost perfect division of labour — ad sales, editorial, marketing, distribution, printing plant, and so on. In digital, everything needs a multi-disciplinary team. If you want to drive a deeper engagement or to improve the customer journey, you need 8-10 different disciplines in the room.

How do you tackle the whole issue of the dominance of Google/Facebook?

I am not sure you can tackle that. It is a dominance of eyeballs, data and distribution, so they are dictating the terms of advertising. But who says advertising is the only model for journalism? Mass media, fast printing presses, trains and trucks to move the newspapers, and TV happened at the same time as the industrial revolution.

For close to 100 years, newspapers and broadcasters reached audiences when advertisers did not have too many choices. This gave them huge pricing power. In 2005, we had $235 million worth of job classifieds in the NYT at gross margins of about 95 per cent.

This year, it went to less than $5 million. It is gone. For me it is certainly worth weeping over — you weep, dry your eyes, and then think of the future. It wasn’t stolen, it was a piece of luck that lasted for a century.

US President Donald Trump has been great for the news business. What happens when he goes?

Our world is going through big changes, a rapid disruptive transition. The populist, nationalistic strains of politics go a lot wider than Trump. This inward looking strain of populism which is concerned with immigration, plays on differences of religion, race, demonisation of elites won’t stop with Trump.

There is a colossal shift in geo-politics and economic power, climate change, there is a whole series of fundamental forces at work. These have led to an incredibly lively news cycle that has been increasing in intensity since 2008.