The New York Times Company (NYT) Earnings Call Transcript & Summary

Well, first, I'd like to welcome everybody to the Morgan Stanley Tech, Media and Telecom Conference. We're kicking off day 1 this morning. I know it's a period of elevated stress for everyone. So I want to thank all of you for your support and partnership, and we will work to make this the best event possible. If you have any questions or concerns that we can hopefully address, there are a lot of Morgan Stanley people running around the conference who are eager and happy to help. So thank you for being here. We are going to touch on a lot of themes across these 4 days here in San Francisco, including the convergence of technology, media and communications. And I can't think of a better way to kick that conversation off with the New York Times Company. And I'm joined once again by Mark Thompson, the President and CEO of New York Times. Mark, thanks for being here.

Good morning, good morning.

Never a dull moment. Thank you for being here.

Yes.

So I know you guys had some news this morning, maybe we should start with that and then we can get into maybe a more higher conversation.

Yes. We've got a change in the guidance, which, I think, sympathy-wise, read what we've said in our filing this morning. Like many companies, in recent weeks, we've begun to see some economic impact from the coronavirus. As you know, unlike many news publishers, New York Times is heavily skewed toward subscriptions rather than advertising. We're seeing no adverse impact on subscriber growth or, indeed, of the expected rise in subscription revenue, which remains strong and consistent with the guidance we gave in our most recent earnings call. However, we are seeing a slowdown in international and domestic advertising bookings, which we associate with uncertainty and anxiety about the virus. We therefore now expect total advertising revenue to decline in the mid-teens in the current quarter, with digital advertising revenues expected to decline 10%. We remain broadly in line with all other guidance numbers we gave you in the call in early February. So a change to -- just the -- as with the advertising parameters in the current quarter.

Got it. Maybe we can take that and broaden out -- you and I were just chatting about the coronavirus and sort of the news of the story. And tell us a little bit about how the New York Times Company, how this is impacting and driving the business overall.

Sure. I'm going to make a really obvious point, but it's sometimes forgotten this. By far, the most important thing we've got to do at New York Times is to cover the coronavirus story as well as we can and crucially make sure that all of our colleagues are as safe as they can be. I mean it's an obvious point about journalism, but we -- but the moment you hear about a unknown new infectious disease in a Chinese city, you send journalists to that city, and we've had journalists in Wuhan and, indeed, many journalists throughout China, ever since this story broke. And I want to say, I think our coverage -- we're particularly -- this is a story, which is obviously multi-part. It's medical and scientific, it's geopolitical, it's economic. It absolutely relates now to domestic politics and so on. And there's enormous public uncertainty. So it's really important we cover it well and do it in a way, which is as safe as it can be for all our colleagues. So that's our main focus. But the effect of coronavirus, combined with a really lively U.S. political news cycle, has been an astonishingly intense period for news. From a business point of view, as we noted in that guidance, we're very unusual amongst these publishers. We're heavily skewed towards subscriptions, which, themselves, obviously, are driven by demand for news. And this is an incredibly intense news period. I don't think it's surprising that we're seeing some current softening as marketers, both -- -- beginning in Asia...

On the advertising side.

On the advertising side, that these clients should -- there should be some uncertainty there. So I would say, we feel very, very, as a company, both now very well equipped to cover the story as well or better than any other news organization on the planet. We've got very sophisticated contingency plans to make sure we can go on covering it and go on keeping the New York Times going, pretty much under all eventualities as this story unfolds. But also we think, from a business point of view, in a sense, this is a really important time for high-quality journalism and that customers around the world will understand that.

We talked last year about the demand for premium news, and you had a very nice year last year in net adds.

Yes.

Can you just sort of put all that into context when you think about the drivers of growth last year and also help us think about what the addressable market is for a [ piece ] of that business?

Sure. And what I want to say is this is a remarkable period for news. Now I never want to underestimate the extent to which demand for news is driven by the actual news cycle. I want to say that in a very significant way, though, we are more ready now to take advantage of this than we've ever been before. We're working really well as a team. We fundamentally change the way we do digital in a way, which is, I would say, visibly to anyone who looks at our numbers, unlocking acceleration in the growth numbers. And we feel confident as a business because we feel we've got into the habit of finding levers and pulling them, and we feel we've got many more levers to pull. And so I mean, the story is, I mean, I would say, about -- probably now about 13 months ago, which was I think in the Q4 '18 earnings call, throughout this target of 10 million subscribers by 2025. So I mean, we were 5.3 million at the end of 2019. This isn't guidance, it's simply mathematics. If we were to add the same number of subscribers in 2020 we added in '19, we'd be approaching 2/3 the weight of that target with 5 more years to go. So I think that business of trying to reset the expectations of our industry, of shareholders and of the wider world to how big these kinds of businesses can grow, I think we're well on our way to proving that out. And it's because, of course, an incredibly intense period for news, but also because of identifiable specific things we've done inside our business to try and drive that growth.

Yes. The migration we're seeing across media is pretty exciting, and it's accelerating. We've got Netflix later today and Spotify in a couple of days. For those of us who are familiar with the video and audio world and what's happening there, how would you compare and contrast the evolution in digital news to those medium?

Well, I think, I mean -- I think there's areas of commonality and areas of difference of commonality, habituation with the idea of paying for high-quality content. But when you approach digital devices, there's a lot of stuff available for nothing. If you want the good stuff, if you want to watch The Crown or Game of Thrones, you're probably going to have to pay for it. That, I think, is common. The idea that you'll begin to see this tiering out and the best stuff is pay, a very familiar concept from environments like cable TV, by the way, but they're not a new idea. That's really common. There are interesting differences. It's possible, I mean, genuinely possible in news to significantly own and operate your kind of intellectual property engine to have a great newsroom and to have employees who create wonderful content and where your -- if you like, your ownership position in IP is incredibly strong. There is no streaming organization on the planet who can, as you were, fill those streams just with their own content. And the issue for the entertainment streamers is the inflation on the supply side because of the competition, means that the search for sustainable margins is very tough. In music, you can see Spotify trying to aggressively move into podcasting as a way of potentially controlling at least some of the IP on which their business depends because, again, they've got their subscribers on one side, but they've got the music companies on the other. And in many ways, the music companies are, maybe exaggerated to say, they're setting price, but they play an incredibly big, big voice and how much they're charging Spotify and other music streamers, which, again, means margin is difficult. One of the reasons we like our business, I mean, news is unlikely to scale to any one publisher as much as, I mean, read that Netflix is aiming $0.5 billion or something on -- from knowing Reed, probably more than that. We're not going to probably scale to that level. However, our control on our cost and the basic idea that once you've got an essentially fixed cost base of a newsroom and investment in product, digital products and established ways of doing things like digital marketing and you go on scaling, operating leverage gets very interesting, indeed, and that happens pretty quickly. I mean -- and we've seen 1 or 2 quite promising signs of that in recent quarters. The 2 quarters of spectacular growth in subscriber numbers, but with actually seeing the marketing cost line is actually going down in those quarters. Now we're going to be intelligent about making sure we're investing properly in growth, but -- and I don't guarantee that every quarter we're going to see that effect, but it's quite encouraging that we're seeing that particular effect of sub numbers up, marketing cost down.

Yes. And it's interesting to think about the competitive dynamics in your business versus theirs, but on one hand, the cost of news production is much lower than it is, at least, in the video world. But I wanted to ask you about this article this morning that Ben Smith wrote, I don't know how many people in the room have read it on New York Times.

It basically says that we're the new Facebook. I've been texting my friends at Facebook to say, "You see. We're just like you." Yes, kind of.

Maybe just to take the article as a launchpad into a question on competition, how do you think about your competition? Is it that you compete with everything on the Internet that claims to be news? Or do you compete with a much smaller set that you're actually pulling away from?

Yes. Well, I think, look, I mean, firstly, in terms of attention, we're competing with the entire world and, indeed, with the big digital platforms for attention. But I think we've got a fairly particular proposition, which is thoughtful, in-depth, high-quality news for people in America and around the world who really want to understand the world and are prepared to take the time and maybe effort to understand it. And that's not everyone, that's a subset of humanity. The one issue -- I mean, Ben Smith's article is suggesting, I mean, that we're becoming a "monopoly." That's based on a notion, I think, I mean, it's quiet -- to be honest, it's quite helpful the article to work out exactly what the underlying kind of economic theory is. But I think it's that everyone is only going to have one digital subscription, and we're in through the door first. The -- and once the New York Times is in a given household, they'll never get another subscription to anything else. So it's like a race, we're winning the race. There's no room for other publishers. Now I want say and I have to say, I think this is essentially nonsensical. We know we will have thriving, rapidly growing international business. And we've done some surveys, country by country. We know the households where we're winning subscriptions. We know, at least, in the surveys, what percentage have already got a subscription to a news organization. And depending on the country, that can be 50%, 60%, 70%, 75%, even 80% of people are already subscribers to something else. And The Times appeals to people who are interested in news and appeals to people who are particularly likely to be interested in getting news from other sources as well. So I think, to be honest, the whole premise that there's a kind of likely ultimate distribution of news subscriptions around the world where, if you like, if it's a kind of like a Poisson, it's a Lambda, the kind of average number is incredibly close to 1. Now I want to say that doesn't -- that's not our experience on the ground, so far. We think, as willingness to pay grows, as the quality of free news degrades, which I'm afraid is likely to happen, that actually demand for news subscriptions and for a choice of multiple sources grows. And you're going to see many, many households who've got more than one subscription. And what I would say to Ben is, who basically seems to be implying that the world will be a better place to -- for journalism if the New York Times didn't exist. Firstly, I've had lots and lots of emails from publishers since he published the piece. They're not saying that. They're saying, "What can we learn from you?" And secondly, we are a pathfinder. We're setting a price for news, a high price. There's plenty of room for others to compete below us. We're beginning to prove out techniques for really getting this business to work. And we are, frankly, a bit of a beacon of hope about what could be done in journalism. So I would humbly submit that, actually, there are quite powerful reasons to think New York Times is good for American journalism and for journalism around the world.

All right. I think those are all fair points. Let's talk about the digital subscription business itself for a minute. You guys, last year, implemented a user registration process, which I think has helped growth. I love for you to spend a minute talking about the benefits of that on the business and, particularly, on conversion, as you guys move through 2020.

Yes. And I think there's a very simple way to think about it. Essentially, now you have to -- most people in most environments have to very quickly offer a single article. They -- they're asked to register and then log on to get a number of free articles for the next month. The effect of this is to greatly increase the number of registered logged-on users that we have on site at any one time per week or per day or whatever. And this group of users we know, and for fairly obvious reasons, they're already habituating, they're already there a lot. We can message them. We can -- particularly now that we can track them because they're registered and logged on, we can track them from device to device. A whole range of tactics for how you might persuade them to become subscribers comes into view, and the straightforward coefficients, the conversion ratios for these guys is much higher than for, say, anonymous users. So we'd greatly -- I mean, really dramatically increased and are still increasing the pool of registered logged-on users. And their greater propensity to subscribe times the growing number of them is a very significant part of the reason why that model is growing.

Are you sacrificing any size of the funnel because you're cutting it off faster?

Well, we thought, and our modeling suggested that we would. And we're not. We're not, really, not that we can identify. We're still seeing very, if you like, peppy top-of-funnel numbers, the total number of users. I want to say, inside the organization, we're increasingly moving to measures of kind of weekly consumption, weekly active users, frequency across a week as being more predictive of our model's success than the kind of headline Comscore numbers, which everyone used to obsess about, and some people still do. And we want our news to be very widely read, widely consumed because we think it's -- we want to extend far beyond our subscribers in terms of the value The Times journalism can bring to America and the world. I think it looks like at the moment, we can have that cake and eat it as well, but we can keep a very broad funnel, very wide distribution influence of The Times and, yet, still be really very efficient at the business of conversion down to significant groups of people into subscribers.

On the funnel front, Mark, talk about your promotional pricing strategy. You guys have a pretty aggressive teaser rate. How does that evolve over time? And has all this data impact the decision?

And although -- I'm not going to argue with the price teaser rate. I mean, we discovered, again, by very careful testing now 5 years ago, that year-long introductory periods, I think a year is quite a long tease. I mean, the notion of a year is a period of habituation where, actually, the offer is itself habituating a given user to get used to The Times, so that by the time you get to the end of the year, that's a pretty committed customer as opposed to someone who is just moving from low offer to low offer. And I think the proof of that is the very encouraging story we're seeing at that year mark about our ability to move people from a low introductory price to a higher price and, in many cases, to full price, so a kind of 4x, slightly more than 4x increase in price, but to a group of people who, by the time they get to the end of the year, will become kind of fallen in love with The Times and what it can do. So I mean, our pricing is kind of amazing. We've got a $1 a week introductory offer at the digital end, so that's $50 a year. We've got print 7-day a week home subscribers outside New York City, who're paying well over $1,000 a year. So potential willingness to pay for The Times for people who are getting a lot of value out of it is very large indeed. And one of the reasons we're launching other products, that we're doing work in podcasting and TV and all the rest of it is so you can build a body of value, which, ultimately, through bundling and all the rest of it, can be used ultimately to fill a demand curve, even to its highest reaches potentially in the future.

Yes. Yes. Just thinking through the rest of the LTV, the SAC math. You've also implemented or announced a price increase on the digital side for the first time for your most high -- long-tenured customers. Talk a little bit about the thought process and size of the increase and also how much your data informs your ability to make sure that lands well.

And not just as it were an analysis of pre-existing data, but really quite careful testing. And testing means at scale, thousands, ultimately, tens of thousands of people and seeing how different prices form and different market, different kind of subscribers. So we did really a lot of -- I mean, we are great believers now in testing our learning. So opinions are great, but actually trying stuff as far as you can. There's always a gap between -- there's always an interesting moment when you do something for real with hundreds of thousands or millions of people, which you've tried with tens of thousands. Generally, one thing I feel very good about is, generally, our experience with the rollout of these big things. The new customer journey registration is an example. The step-up pricing is an example. The main price for us, I hope will be an example, is when you see the test proving out in reality. So I mean, we were -- we're looking to do 2 things. We're obviously, ultimately, looking at optimizing the economics and LTV, and the direction of LTV is one straightforward way of looking at that. We don't want to do anything, which is going to, however, decelerate the acquisition of new subscribers. So that's partly a marketing issue about not wanting contention about price rises over here, confusing messages about introductory offers over here. But also we wanted to execute both effectively and simultaneously when we're doing a lot at the moment. We're continuing to work with the model. We've got a general price rise. We've got step-up pricing. We're still trying to acquire very large number of subscribers at the same time. But part of the changes we've made in the digital organization are to enable us to do all these things effectively simultaneously.

Got it. Okay. Before we get into sort of margins and expenses, I also want to ask you about cooking and crossword subscriptions and how you think about that opportunity and, particularly, these sort of unit economics for those products, if those are some of the -- on a standalone basis, you feel are attractive.

Well, I mean, firstly, I want to say that our model is really -- I mean, what's going on? It's partly almost trying to replicate a very classic idea of New York Times from its print age as being a gigantic bundle of great content, the heart of which for most subscribers is news and opinion, but which goes far beyond that. But the old physical -- great physical New York Times told you what to see on Broadway, you found your apartment through it, you've got recipes from it, you figured out where to go on your holiday from it, your job and the stuff you've read so you could sound like you were well informed when you got to the job, all of this stuff was wrapped up in this big fat bundle. And that slightly got kind of sort of denuded or it got impoverished in the first generation of digital, where The Times got very associated with news headlines and opinion and all the rest of it. And although the rest of the stuff was there, nobody used it. And in some ways, the stand -- the "standalone" products are part of the strategy, which is rediscovering and, in some ways, reshaping that broader offering to fit with consumer needs, and so rather more precise consumer problems to be solved. So dining was a section about food, in general. NYT Cooking is -- answers the question, what are you going to cook tonight for your kids? What are you going to cook this weekend? What are the kind of new fresh, interesting recipes? So it's a very particular thing. We think they, both cooking and crosswords, are very extensible. Crosswords, you'll know now, we've got other highly successful games. Spelling Bee, in particular, is a phenomenon for us. But -- so the idea of puzzles for smart people is itself a very extensible business. Cooking itself naturally leads to healthy eating, food for children, possibly into a broader kind of full kind of wellness kind of offering and so on. So they may be extensible in themselves and they will probably get siblings, they will probably get other new products as well, and the hope is on products, which are sufficiently compelling and clear, that they can be built as individual standalone will have the economics, which would justify their existence as standalone businesses, but also in the kind of deep in the chest game, 5 moves, 10 moves ahead, become part of bundling solutions and richer value for subscribers to start seeing upward pressure up that demand curve and seeing ways of, over time, when we're pivoting to, in a sense, you're thinking more centrally about ARPU, about driving up the value of individual subscribers. And I want to say, I don't know how that plays out. What I do know is if you've got a group of wholly owned IP, kind of zones of IP creation, producing valuable, engaging, high-quality differentiated content for users in America and around the world, and you've got that flow of audience engagement coming and loyalty coming into it, we can figure out how to make money out of it.

Right. And then presumably, a lot of the content costs are leverageable across these products, I would imagine.

Yes. That's right. But I mean, the main leverage is simply scaling digital scale. I mean, to me, the biggest single thing is if you can get -- I mean, you can argue about what the total audience is, 130 million, 140 million, 150 million people. If you can get content made by one journalist, add 250 million people, that's enough leverage given the cost of that kind of IP creation to make for fabulous margins.

The last thing I want to ask you about before we move on to other parts of the business is really around how you think about the international digital subscription opportunity for New York Times relative to the U.S. Does the approach to market differ much? And when you think about your long-term subscriber target, clearly, international is a part of that.

Yes. And we've said publicly, we think that maybe 2 million of that 10 million by 2025 will be ex-U.S., which gives you some scaling. 20% at that point is going to give you some scaling of what we think about this. Well, I've talked about some of this, but we would expect in -- not just in many, but probably in most ex-U.S. households, there are some exceptions. Canada might be an exception, for example. But in most of these environments, and it was -- forget subscriptions or just think about news consumption. We're probably going to be #2, #3, #4 and #5 in a lineup of consumption. A lot of news is local. People -- their first protocol may well be a national or a regional source of news before they turn to, if you like, a broader global external perspective. And so you could say, in practical terms, maybe we're competing with -- in India or in France with CNN or The Economist or the FT or The Wall Street Journal rather than directly competing with Le Monde or Le Figaro or the Frankfurter Allgemeine Zeitung or whatever. So it's a different place. That probably says something in the end about ultimate pricing and about introductory pricing. We're experimenting with significantly more aggressive introductory offers in some international markets than we do in the U.S. And we're exploring. I'm not making any promises, but exploring the idea of breaking out numbers in our disclosures sufficiently that people can see the track of the international business and, as it were, they can derive international ARPU separately from domestic ARPU to reflect because, obviously, great success internationally in driving new subscriber numbers with very aggressive introductory prices gives a dilution to total ARPU, which I think will be misleading in terms of what we're seeing in our big home market. So we'll come back to that later in the year and figure out whether that makes sense or not. But the -- we think it's a great further opportunity for The Times and, again, a long way ahead in the chess game. There is, I think, some elements of a race here to the extent that there will be a very small number of successful, ubiquitous, high-quality news brands for the world and for that vast market, growing market of the many hundreds of millions of college educated people with a great command of English across the entire planet. We want to be one of those.

Sure. Let's talk about the expense drivers in the business. I want to ask you about content costs and also marketing. You have the benefit of not being in the "streaming wars" of the video world. But how are you thinking about the right level of content investment over time? And then on the marketing side, you mentioned marketing actually has come down a little bit over the -- on a year-on-year basis recently. How are you thinking about subscriber acquisition cost in the model over the medium term?

So content, I mean, we've seen very significant growth in our newsroom. We've got, at least, 300 more journalists at -- in The Times than when I arrived 7 years ago at The Times. We do not see, in all the scenarios we model, the idea that there's going to be a need to continue that growth in those costs at the current rate. Our international strategy does not -- is not based on vast numbers of additional boots on the ground around the world. We don't think that's appropriate. We think we cover the world for the world, local for global rather than local for local. Others have taken a different view, but that's our view. So we see those costs, over time, potentially continue to grow. But we see that as it were, the rate of growth diverging from the growth in revenue if we successfully scale the subscription business. And I think, broadly, I want to say, a similar story on marketing. We hope that the digital product is going to do more and more itself. I think we can really see that. I would point right now, in our digital assets, the way our live coverage, for example, live coverage of coronavirus is knocking it out of the park journalistically and is driving immense daily audiences. So I think there are product enhancements we can make, which, once you've made them, and you've got a team working on that kind of journalism, you don't have to endlessly add to it. So I see the product doing more work. I see us getting -- deriving more revenue, we can come on and talk about this from our existing IP factory, the Facebook News will be an example of that. I think with marketing, the pivot you've seen where we're relying a bit less on performance marketing at the conversion point, I'm thinking a bit more about brand marketing, for example, our 1619 ad in the Oscars recently, just try and get the message about the brand, the message about our journalism out and, more broadly, to people who aren't familiar with the brand, so you're beginning to find as our new readers, new subscribers of the future, I think you see that. But we are -- we have a model, which calls for improving operating leverage as we scale. And we can see it in our model numbers. It's my job and our CFO, Roland's job, in particular, to make sure that we watch that very closely and make sure we actually live up to our word in terms of delivering that operating leverage.

Okay. Let's move to those other revenue opportunities. I wanted to ask you both about Facebook News and also what Apple has been doing on the news front and get your perspective on both of those from a -- both from a industry perspective and also a New York Times business point of view.

Yes.

Maybe, we start with Facebook. Talk about your relationship with them and how that's impacting your business.

Well, I mean, we -- you'll know that these relationships are extremely dynamic. And it's kind of -- or perhaps you don't know, I mean, these are very -- they kind of shift month -- week by week, month by month. I would say at the moment that we've been a supporter of Facebook's initiative, Facebook News.

Why?

Because they paid us a lot of money. No, we did it because, actually, we thought it was a genuine effort by Facebook to address some of the issues people have had with that company, delivering human curation, focusing on believability and quality and trying to find a place where the 2 billion or so Facebook users would know they could find high-quality news. Now I don't know whether it's going to work for them. I mean, I would say, broadly, we'd wish it well. One of its great virtues is, although they are indeed in a contract with us and are paying us for the presence of our journalism there, when Facebook users click on a Times story, they come to our asset. So this brings Facebook users to our destination to actually consume our journalism.

Are you getting the data you want out of that?

Yes. Because they're coming to us. Yes, we are. Now it's early days yet. This is -- it's launched now, but it's all very early days. But we thought that, that was an example of a big platform listening quite carefully, going through quite a tough process of discussion and dialogue and agreement. So that's positive, I think.

Okay. And how would you contrast that to what Apple News and Apple News Plus and their approach?

Well, I mean, I want to say that I don't want to -- as we compare and contrast, we tend to look at each of these platforms in the light of our strategy and our overall philosophy and look at them one by one. I want to say the benefit of Apple News is it's got significant global distribution, of course. There's a natural affinity between Apple devices and our audience. On the downside, Apple News is an alternative experience. Apple News does not -- you don't consume -- we don't produce -- we offer a very small number of stories for Apple News at the moment. You don't consume those stories at The Times. You consume them within Apple News. So it's habituating people to look to Apple News for news, not The New York Times, even if the story happens to come from The Times. That runs counter to our philosophy.

Right. You want them in your [ platform ].

Well, at that point, the kind -- is the distribution you're getting worth the fact that, actually, you're using your journalism to habituate somebody to somebody else's products. I mean, this is somewhat analogous to the years where Disney was giving -- selling its content to Netflix as opposed to running its own streaming service. However, I have to say, the economics that Disney was enjoying when they were selling their shows to Netflix were rather better than the economics we get from Apple News. So there's a question mark about that. I want to say no more and straightforwardly, I've said that we're looking at each of our platform relationships in the light of where we've got to and our confidence in our destination. You can expect us to hear more about that over the course of the year.

Great. Want to ask you one more and then if the audience has any questions, please raise your hand and wait for a microphone. So I want to ask you about podcasts, how that fits in, both from an engagement perspective and also sort of the business of podcast production and monetization.

So I mean, we think podcasts are an incredibly exciting new way for The Times to express its journalism. And we have with The Daily, probably, the single most successful podcast in the world. So the proof-of-concept that we can -- what we do, what we stand for, our people, our journalism can really work in this environment. We've already proven that. And so you think about scaling, you think about audiences. The Daily, I think everyone here, I suppose, heard me say this before, has got a remarkably young, engaged audience. It's a millennial, significantly a millennial audience, 3/4, 40 and under. I think, 45%, 46%, 30 or under. Deep engagement, the show is 21, 22, 23 minutes, 5 times a week. We've got millions of these guys coming to us again and again. And so we want to scale. There's been some speculation about this in the media. I don't want to go into that, except to say that we absolutely believe it's an opportunity for us having got the spearhead to widen, to get more engagement. And when we think about monetization, I think it's kind of all good news, really. I mean, this is, at the moment, very high CPMs, but this is a very attractive audience. And so there is a straightforward near-term advertising opportunity, which can more than pay as it were for the cost of this stuff. So it can be profitable from the get-go. But you'll know, if you've been following us, that when we think about deep engagement, deep value, that always makes us think about whether there is a long-term habituated relationship to have with these users, which, ultimately, can have a subscription revenue attached to it as well. And I don't care that I don't know exactly when or how that will be. I can just smell that the -- to get this essentially new audience to introduce them to The Times, its values, its journalists and to deeply engage them is going to be very good for the business.

Sure. Makes sense. Questions in the audience. I've got 2 upfront, please, if you -- there we go. Go ahead.

You guided to a return to digital ad growth in the second half of the year. I don't know if the ongoing circumstances might change that. But could you talk about, just more broadly, the drivers necessary to deliver on that return?

Sure. And I've talked a bit about this on the call a few weeks ago. We're very excited about this business we're building with very, very large-scale deals, by which, I mean, in many cases, multiple tens of millions of dollars for a deal, which plays out over more than one year. That will be -- and we've, literally, in recent weeks, made significant progress. So one business straightforwardly is a different kind of long-term, multi-month or, in many cases, multiyear relationship with big brands. We think the development of really effective advertising products based on the very high-quality, first-party data we've got, and this relates straight back to the very large number of registered logged-on users we now have on site, where we see lots of behavior, and it means that we can potentially offer quite rich segmentation of our audience without any use of third-party data at all. So there's a number of new products for us as well and to continue to look at whether there are opportunities for us in new platforms with new inventory, like podcasting. So those will be some of the reasons that, notwithstanding the coronavirus kind of perturbations that we're feeling at the moment, while we remain very confident that we can achieve what you said.

Let's do one last one over here.

Now you referred in your comments to the intense new cycle that you're benefiting from right now. Could you maybe just talk about what specifically it is that you're benefiting from? Is it just politics? Or is it something else? And could you perhaps talk about what you expect -- yes, what might change that maybe post the election?

Sure. Sure. So I mean, I want to -- I don't want to slip accidentally into guidance here. But -- so let me just talk -- I'm -- if you know, I know nothing about business. I'm a journalist, and let me just talk as a journalist here. What's happening at the moment in the news cycle is very broad based. We've got some set pieces. We've got a presidential election, we've got a lively horse race, to put it that way, amongst the democratic contenders, so that's been very lively. But since the turn of the year, coronavirus is a bigger story than that. It's now the biggest story. It's not a political story. We've seen other, I think, really enormous point story, the Kobe Bryant story. Now you may not think of the New York Times as an obvious place. But actually, Kobe Bryant has been an enormously important story and its ramifications. #MeToo and the recent trial of Harvey Weinstein is an enormous story for The Times. People come to The Times for climate coverage, and I would talk about a whole set of climate story, but most notably, in January, the Australian bushfires has been a gigantic story for us. Harry and Meghan has been -- so you've got a -- and that only scratches the surface of -- Brexit and the Brexit saga, in my country, has been something, which The Times readers globally, I mean, and particularly in the United States have been fascinated by. Brexit is not a big story for most American news outlets. For The Times, it's a really -- it's intriguing. It's that business of some of which feels important, some of which feels like you might have residences in this country and which is hard to understand. And when you're looking for a news source, which is going to make it easier to understand. So -- and certainly, in -- the Notre-Dame fire last year, we were outperforming most French outlets in terms of our coverage of Notre-Dame because our French audiences would think about the New York Times as bringing insight to bear on that story. So of course, I understand why given the last 5 years, people think, well, supposing American politics quietens down after the election, will everything change? I want to say if you look around you, what's happening in the world, I don't think the news cycle is going to quiet down anytime soon. And I would say I'm kind of not just a journalist, but a political journalist. I don't think the American political system itself is showing signs of kind of sort of imminent tranquility. That -- I mean, whatever the outcome is in November, that, I think, is going to continue to be a complex, divisive, intriguing story for many years to come.

Well, I think in the spirit of imminent tranquility, we will wrap up. Thank you very much, everybody. Thank you for being here, Mark.

Thank you. Thank you, everyone. Thank you.