The New York Times Company ($NYT)

All right. We'll get started. So I'm happy to have back from the New York Times Company, Meredith Kopit Levien, President and CEO. Meredith, thank you for being here.

Happy to be here.

Okay. Great.

Spring in Boston. Better than winter.

Hot Spring in Boston. Okay. So over the past 5 years, you have referred to the New York Times as the essential subscription product for someone wanting to understand and engage with the world. So there's been a lot of evolution in the product that we can cover. But at a high level, what are the key strategic pillars that have guided you as CEO during this period?

Yes. Well, there are 3 pillars to being the essential subscription that we've been focused on for the last 5 years. The first one is to be the world's best news destination, kind of hard stop. The second one is to have market-leading lifestyle products that help people make the most of their lives and passions. And the third one is to put those 2 ideas together in an interconnected product experience or a bundle so that whatever is going on in your world or the bigger world, the Times has something relevant for you every single day, and we do that at increasing scale. And I would say that those 3 pillars are powered by 4 advantages that I really think are making the whole strategy work. The first one is that the Times now plays in really big spaces with a lot of running room, news broadly defined and also sports and games and recipes and shopping advice. Secondly, within those spaces, we have built these unparalleled content engines for original reporting and sort of journalistically rigorously created lifestyle content that are really hard to replicate. I would say the work we do in content, we reported from 150 countries in every state in this one last year. It's really hard work. And as others are doing less of it, the Times has continued to invest in it. The third kind of strategic advantage is that we have a capability to harness technology to drive consistently strong engagement, and we do that through format innovation and feature development and innovation in the product experience and even innovation in how we use proprietary data at the Times. And then the last advantage is we're able to monetize that consistently strong engagement across multiple complementary revenue streams. And I would say all of that sort of drives our ability to get more people to have direct relationships and daily habits with the Times. And we're confident as we do that, we can build a larger and more profitable company.

Great. That was a great opener. Let's start with this. So you've often noted that the Times operates in a media environment dominated by big tech firms. And to that, I would now add AI platforms. So given that backdrop, how do you kind of balance focusing on what you can control versus the periodic need of adjusting to some of these external forces?

Yes. That's a good question. Let me say what we can control and what we put a lot of care and thought and investment into. It's that unparalleled engine for original reporting and high-quality lifestyle content production. What do I mean by that? I mean we have a giant team of the world's best journalists who go out into the world and unearth information, new information, unearth facts that really matter to people. And they do that with professional expertise and often domain expertise, and they do it by following a time-honed process for keeping that work uncompromised, and that's true if we're reporting on matters of profound civic consequence, and it's also true if we're writing product reviews of which toaster you should buy. And they're doing that in a way that is human-led and where the output of that reporting, that sort of human-led reporting, is done in an expressive way where people really engage with it and get understanding. And it's just worth saying, even as the AI companies, in particular, aim to build substitutional products, it's very hard to imagine anyone is able to replicate what I just described. And what I just described, that need for facts, for information sort of in service to no one's interest but the public, that need is only growing. So that's the first thing I would say. The other thing I would say, because you're asking sort of how do we balance that, our aim is to have news coverage and products that are so good that people seek them out and ask for them by name and make room for them in their lives however the ecosystem evolves. And we recognize that we operate in an ecosystem dominated by these big tech companies. And our job is to kind of make the best of that to get people to find and experience and sample our work all the while that we are really trying to get people to come and have a direct relationship with us and come to our destinations. And I think our results show that we're pretty good at that calibration.

Maybe as a follow-on to those comments about the content engine and kind of what goes into producing at that scale, what do you think the position of the company is with regards to journalistic talent, not just on news, but across the entire coverage?

Let me say the thing I'm proudest of in my 13 years at the New York Times is that we have like 1,000 more people in the core newsroom, 1,000 more people. So it's about 2,300 people in the core news operation. And they're not just any people. These are the best journalists in the world doing this work to a standard for uncompromised journalism. I'm incredibly proud of that. And they're able to go wherever the story does across the breadth of human experience. In The Athletic, we have another 550 journalists, the world's largest sports journalism operation. And then we've got close to a couple of hundred people doing rigorously reported product reviews for Wirecutter. So this is an enormous operation. I didn't even talk about cooking and games. Here's the proposition for talent. And it's a proposition that I would say has worked for the Times for decades. We bring the best journalists in the world, and we give them the time and the space and the resources to do the best work of their careers. And in many instances, I always think this doesn't get talked about enough, a piece of enterprise or investigative journalism could take months or even years. So a journalist could spend many, many months working on a single body of work and have the time and the space and the resources to pursue it. So we give them great conditions, great people to work with. We give our talent what I think is the industry's best support structure: that's lawyers and fact checkers and editors and data scientists and visual journalists, the people who can really make their work feel magical when it comes out into the world. And we give them a giant audience, so the work has a real opportunity for impact. So we think it's a very good proposition. I think it's a proposition that has served the Times very well. I think it served our journalists very well, and it served the public very well. We recognize it may not be for everyone, but we feel really good about where it is and our ability to continue to attract and retain the world's best talent and also to nurture and develop stars within the Times.

Got it. So when we look at the app today, right, right at the bottom next to the main feed is video and podcast. I used to kind of think of these as an extension to the core reporting, but am I right to suggest that these are sort of increasingly the destinations themselves?

Yes. I think it's both. Let me say, anything we are doing with format innovation is about getting more people to experience our work. So it's really meant to enhance the journalism and attract more people to that journalism. And for many people, we now have a destination that you can come to. So I'll take video as an example. We've got a Watch tab where every day, you can see roughly a couple of dozen videos from the Times sort of presented in an orderly way where it's like a whole experience from the Times that you can watch. And there are plenty of people who are engaging with the Times that way. It's true for audio, too. But also, if you're just engaging in the today feed or you're on the website, you're in the core report, you're going to see much more video. You're going to run into much more video in our live experience. You're going to run into it within articles. You're going to see much more of a multimedia experience. And the idea here is that we can meet the reader, the listener, the watcher kind of wherever they are in terms of modality, their preferred modality for taking in the information. And we're early in that. We really like what we see so far, but much, much more to come.

As you build out the video capability, I think a question we sometimes get is kind of where is this investment going in terms of resources and format. So it'd be great if you could speak to that. And then just on the consumer end, right, as you see your users ingest this video, how is that impacting their experience, right, frequency, time spent with the product?

Yes. We've got big ambitions in video. Our aim here, just stepping back, is to be as preferred a brand for watching the news and the other things that we do as we are for reading and listening to it. And you're seeing us really ramp up production. So I talked in our earnings call about how we doubled the amount of reporter video we had done. You're asking about investment. What I'll say is we've got some inherent advantage here, and I've just talked about this extensively. We've got a news team, reporters and editors who can go wherever the story goes. That's sort of already there. And what we're adding to that is like a layer of video production capability. In terms of the formats that come out of that, you're seeing us do much more, we just call it reporter-on-camera video where the reporter is explaining their story or actually bringing you into the story, more just straight up news video where in some instances, it's actually more powerful to show you the things. So we show you the things often with text or audio over it. We are intently focused on continuing to expand our trademark visual investigations, where we piece together video, a lot of it UGC, to actually unearth new facts about what happened. You've seen us do that. And then I would say we have a lot of traction and momentum for our expanding shows portfolio. So we're making kind of full bore shows across politics and culture and technology, and all of that is really working. You asked about engagement. It's early for all of it, but we really like what we see so far in terms of consumer engagement, both on and off platform, but early.

I guess at the same time that you're building out the video content, we've seen some cable news networks move towards their own DTC products. They put up digital paywalls. Some of them have extended into lifestyle content. Is there a convergence here? Or is that the wrong way to look at it?

Yes. I don't know if it's the wrong way to look at it. Let me tell you how we look at it. We've got a very big ambition here. And we see video as an opportunity to get more engagement from the big audience we already have and also to get net new audience. On the question of sort of direct-to-consumer platform for it, what I'll say is we're now like 11 years into building a really powerful direct-to-consumer business where we've been building a trusted brand in news and increasingly in these other lifestyle spaces and where we can get lots and lots of people to have direct relationships and daily habits with us. And we can do that because we've been continuously adding value into our products and showing up in a very multidimensional way in people's lives. I think video, we know video helps us do that even more, and it particularly helps us reach people who want to do all those things, but want that modality in video. So that's what I would say we are trying to do. To the extent you're asking me how that relates to what's happening sort of in other video spheres, what I'll say is we think we really benefit here from not having like an institutional incumbency. We know that there is an enormous amount of news and lifestyle content consumption happening, enormous amount, in digital video, and that's really what we're aiming to get and to win. And you see us doing that sort of first in formats that are native to us. So video that really works on a phone, video that really works when you're engaging digitally. But make no mistake, we want to win the moment. When something big happens in news, or in any of the lifestyle spaces we play in, ultimately our long game is we want to win that moment, whether you're going to read it or listen to it or watch it. We want to win that moment sort of wherever you are coming to watch it.

Maybe just one last one on this topic. So video podcasting, we've seen you extend the reach of the content to places like YouTube or Spotify, the viewer stats and charts show clear engagement. But how do you kind of use that free access to ultimately drive consumers back to the core Times?

Yes. It's a great question. I would say we've got like one of the things that really works about our model has always been this calibration between enough gravity at the destinations and in the products that you'll make a direct relationship and ultimately pay, and we make a lot of stuff available to people to sample. And we do that, whether it's on YouTube or Spotify or any of the other places we do that, we do that to build awareness for our work and to build preference and to build consideration. And I think that is particularly important, we're talking about video, that is particularly important in video because we are now sort of teaching a whole generation of people that the Times is a place you can watch stuff too. And so that's why you see us do this. And I'll say, I'll go, I think The Daily and what we did in audio is pretty instructive here. The Daily is going to be 10, I think this end of this year or early next year. So The Daily has been around for a long time. It is still the largest and most successful news podcast by audience. It has a huge listenership every day. And if you actually just looked at the arc of The Daily's kind of growth and its ability to touch culture, it really coincided with an arc of growth in our subscription business. And those 2 things are not, they're not, one doesn't very directly send people to the other, but it certainly got people interested in the Times and got people interested in the stories from the Times. And I think the same will apply here in video. And I'll just say, so at a high level, being on YouTube, being on Spotify gives us a chance to get new people to engage with the brand in a deep and significant way. But ultimately, we want to do that in a way that redounds to getting people to come to our destinations. And I'll just, I'll give you a couple of examples of how we do that. We just published 2 or 3 weeks ago, 30 Greatest Living American Songwriters, and we had 7 extraordinary videos with songwriters, including like break-the-Internet video, a 30-minute video of Taylor Swift that we were incredibly excited about. And we obviously clipped that video, and we promoted it everywhere. It was promoted very extensively. But for the first week, if you wanted to watch that video, you couldn't actually watch it on YouTube. You had to come watch it on the New York Times. And just to give you, like in another part of the portfolio, another example of that, in cooking, one of the ways we're building our cooking funnel is we're doing collaborations with food creators who are outside the cooking universe. And so you watch the video, you get excited about that in the universe of that creator. But if you want the recipe, you come to our app to get the recipe.

So this past quarter, the Times disclosed over 13 million paid subs, putting you closer to your 15 million goal that was by the end of '27. So we get asked this question often, but what's the best definition of your TAM, the one that you use when you think about executing to that goal?

Yes. When we think about the TAM for the Times, we think about the giant spaces we play in and what's the number of people in each of those giant spaces, news broadly defined and then sports and recipes and games and shopping advice, who are willing to pay for a product in those spaces. And what I'll say is we believe that TAM is at least as large as we've previously reported and underpenetrated by the Times. And we've got a lot of signal in our own product experience that would suggest that. We've got an audience that is many times larger than our subscriber base. And so we're able to call them to action using the sophistication of our data science and our model to get them to convert at the right moment. Who are those people? We've got 50 million to 100 million people who are coming to our sites and apps every week, much more than the 13 million and change subscribers. We've got a huge trove of podcasts and e-mails that people watch, listen to, read on a daily basis. And we've got over 150 million registered users and counting. So we really feel good about the TAM and our position within it and the running room within it. How are we going to go after all those people as we execute on our major priorities that we keep talking about: keep crushing the coverage, do it in more formats, add value in every part of the product portfolio and then merchandise that value in ways that get people to sort of experience more of our product or experience it with their friends. As we do that, and we have running room in all of those directions, we believe we'll be able to keep penetrating that TAM.

Okay. And bringing consumers into the ecosystem, you've had success with promotional offers like $1 a week or $2 a week for family plans. I think ultimately, your digital subscription growth, though, a more powerful lever over time has been in price as you graduate subs or introduce new rates for tenured cohorts. Maybe just kind of speak to your strategy of addressing the whole demand curve as you've termed it.

Yes. We feel really good about everything. I've been at this a long time, our CFO, who's here, we've been at this for a long time. We feel very good about our pricing power and our ability to sort of drive price in the appropriate moments. And what I'll say is we've got a value-based approach to pricing. Most people come in, however they come in, a single product or the bundle, they come in at a promotional rate. And as they engage more, we've got a model that gets them to engage more. And as they do that, they step up to interim and full prices. And we feel very good about our sophistication and being able to do that. And we also feel very good about what we see at those step-up moments. That has worked really, really well. And the idea is we want to be able to get at everybody under the demand curve, and I think you're seeing that really work. And I'll just say the thing we don't talk about enough is each part of the product portfolio is getting more valuable with every passing month and quarter and year. And so our ability to get that price, the consumers' sense of value from it is getting better and better. And the comps are not as good.

So going back to the start of '25, maybe earlier, digital advertising has been a standout metric, growth continuously outperforming expectations. We get asked this all the time. Maybe just unpack some of the drivers of that performance between supply, organic demand. I know you've introduced some new tools for marketers as well.

Yes. I'm as optimistic about our ad business as I've been. It's an exciting time in our ad business. And I'll say that it's for a handful of reasons, and they sort of look like the reasons our consumer business is working. The first one is we are in these big spaces, universal need for news, very appealing to marketers, games, everything else we do in lifestyle, very appealing to marketers. So we're in these big spaces and with giant engaged audience in those spaces and really well-honed, deliberately designed ad products where we have big canvases and a ton of first-party data, proprietary data that we've been able to unlock for marketers that just really, the combination of that and the canvases really sort of makes the ads work, so marketers return. And that means because we're across all these spaces now and the ads really work, we're able to get more share of wallet from the marketers who already work with us, and we are able to bring in a lot of new marketers. So that really feels like it's working.

Your Chief Advertising Officer, Joy Robbins, recently used the term never newsers to describe marketers anxious about placing their brands adjacent to news. That's probably relevant recently. I'm curious, first, how much of that is a concern for you, just given the volatile world we live in. But separately, how do you take action against that and sort of steer that demand elsewhere?

Yes. Let me say a couple more things about your prior question, it will get me to her name for activity we're seeing beyond news. You asked me before, and I think it's important to this, about sort of supply and demand. And what I'll say there is we added a lot of supply last year, particularly in the second half of the year in our big products beyond news, particularly in games and sports. And we will continue to, and you saw us benefit from that at the beginning of this year. We'll continue to add supply. It will be across the portfolio this year and more incremental. And I think you always are adding supply as you're growing audience in addition to developing new ad products. What you're poking at is demand question, and I probably use different words. By the way, our Head of Advertising is an extraordinary leader. She has done incredible things with this business, and we're very, very happy with that team. What I would say is I've been around ad businesses for a long time. There are always some marketers who don't want to have, in a time of intense news or difficult news, war, geopolitical turmoil, there's always, I mean, when I was in magazine advertising, there are always marketers who don't want to run near that. And at the same time, there are always marketers who want to be around news because news, particularly high-quality news from a trusted brand, is a pointer to "this is important." So I just want to push back on the notion that news isn't a great place for marketers, and I've seen that in my whole career. It is because of the audience that amasses and the capability of pointing to "this is important." In addition to that, we've got all these lifestyle products now. So a marketer in any given moment who wants to work with the Times has a whole selection of places where they can do that. And I think what Joy was probably referring to is we are able to sort of capture the demand in any number of places now that are very appealing to marketers, and that's really made the business more resilient, and we're pretty excited about...

Got it. Maybe shifting gears, I want to touch upon games. You said in an interview recently that this was the most up-and-to-the-right thing you've experienced in your career in terms of attention and cultural relevance. There's no shortage of free games on the Internet. What is New York Times getting right here?

Yes. Lots and lots of people play and love our games, tens of millions of people. It just really, really works. And let me say what I think works, some of which doesn't get talked about enough. Lots of companies make games, including big powerful tech platforms. I think the reason the Times games have really broken through is that they are from a brand and they are associated with the brand, and they are kind of at the home of a brand that is 2 things. One, its essence is about making you smarter every day. And two, it's like a shared cultural experience. And I think we really benefit from both of those things. And people tell us, and I think people know this, they don't just play the games, they play them with their family and their friends. And the games don't take a ton of time. So if you play 2 or 3 or 12 of our games, you can do it throughout the day, and there's a real sharing factor with your friends and family. The other thing I'll say about our games is I talked earlier about our content engines having journalistic rigor everywhere. They're just really well made. We've been able to attract game makers who work at a very high standard. And I think that everything from the sort of what are the clues in Connections to how does that experience, how elegant is that visual experience, it all really works.

As you noted, 12 games on the app right now. I think half are paywalled.

I think 5 are free, so it's a little more than half now.

Okay. And then can you just discuss a bit the strategy of sort of turning free users into pay users and then obviously, how you balance conversion to paid with the benefit of obviously having that free traffic, right?

Yes. I mean the short answer is we need some megaphones. Wordle is a great megaphone, like we have these extraordinary games, tens of millions of people play. And then you need some things that are kind of sufficient gravity that lots and lots of people will also pay because it's so worthwhile in their lives. And I don't have more to say than we're always kind of calibrating with a lot of sophisticated data science about what's the right balance between those things. And it's always a balance, meaning you're always going to want to have enough out there that people can sample at real scale and stuff that's worth paying for.

By the way, I did like on Ben Thompson's podcast where he asked you if Wordle was the best media deal of all time.

Yes. It was a great deal. I'll just say that. We're so happy to own it. And I just want to give credit where credit is due. After we acquired Wordle, our team made all these other incredible games: Connections, Strands, the Mini; these were born after Wordle. And everybody should play Crossplay if they're not; grab a friend and play Crossplay.

Okay. I want to touch upon The Athletic. So I think historically or when you did the deal, fans tended to think of it as a destination for deep sports journalism. I open the app today. There's highlights, there's scores, vertical video. Kind of just speak to the evolving strategy.

Yes. I mean the short answer is, at real scale, we are uniquely good and have been uniquely good at a particular thing in serving the sports fans, which is high-quality independent sports journalism about the team you love and the league that you follow. We are awesome at that, and we do it at a breadth and scale. Nobody else does it. What we're aiming to do, and you mentioned highlights, you mentioned even sports games, we have Sports Connections now, which really works. What we're aiming to do is meet more of the sports fans' needs. That is, we're really good at meeting that need, but we think there are other needs we can meet, including helping you have a companion in the live game moment, including helping you test your sports knowledge as you do with games, and a number of other things. And highlights are a great example of that. There are some aspects of our journalism where showing it to you is just as important as describing it to you.

Great. Maybe just as a follow-on, I think it's sometimes forgotten the depth of soccer coverage on The Athletic. Just interested how you're leveraging that opportunity given the World Cup...

We are very excited about the World Cup. I'll be really short here and just say there are 150 professionals in The Athletic newsroom who just cover soccer in Europe and in the United States. We are highly prepared. We are very excited about this. There's a ton of reader interest and there's a ton of marketer interest and watch what we do with all of it.

So The Athletic and Wordle were both acquired, I think, in January 2022. Wirecutter was several years before that. But I think in those 3 instances, you used M&A to effectively build out your lifestyle brands. So question is, the Times is sitting on over $1 billion of cash or equivalents. So no shortage of kind of capital to execute on deals. Do you see anything in the media landscape as an opportunity today?

Let me do the sort of broad reminder of our approach generally to capital allocation. Our first priority, and you've seen us do this, video is a big way we're doing this now, is to invest into our strategy organically, and that's why we're talking so much about video. It's a big part of the opportunity. Of course, we've got a capital return target, more than 50% of our free cash flow back to investors in the form of dividends and buybacks. And yes, we are always open to M&A. But what I'll say there is the bar is really high. I mean we've got a really clear strategy and the bar is high financially in terms of what the return would be, and the bar is very high in terms of fitting into our essential subscription strategy in a very clear way. The Athletic did that brilliantly. Wordle did that brilliantly. Wirecutter does that brilliantly.

Okay. I think that's a good place to end it. Thank you, Meredith.

Great. What a pleasure to be here. Thank you.