Publishers are witnessing a baby digital subscription boom, and its parents are that odd couple of our times, Donald J. Trump and John W. Oliver. Their offspring pop not just from the womb of the New York Times (NYT) - Get New York Times Company Class A Report building at Eighth Avenue and West 40th Street in Manhattan but now from hyperkinetic newsrooms from coast to coast.
Trump, of course, has become the greatest source of lead generation the American press has ever seen, his campaign and then election inspiring hundreds of thousands of Americans to rush to buy digital news subscriptions and memberships. Oliver provided some seed, name-checking The New York Times, The Washington Post and ProPublica in a legendary journalism-affirming appeal in August, which so far has generated 7.4 million views on YouTube.
A month ago, the big number that generated the big headlines was that of the Times, as it passed the 3 million subscription threshold. It is now the numbers generated by dozens of media companies that certify the Trump bump as a major trend in the news publishing business.
In the magazine world, January was the biggest subscription month ever for Conde Nast's The New Yorker. Between the Nov. 8 election day and the end of January, the 92-year-old title sold 250,000 subscriptions. That's up 230% compared with the same three-month period a year ago. January alone produced 100,000 subscriptions, a 300% increase over January 2016. The magazine now has its largest circulation ever, at more than a million.
Its fellow magazine hard-charger, The Atlantic, also broke records. First, November saw an all-time record number of subscriptions to the magazine. Then, December doubled the November numbers. Those two months accounted for one-third of all subscriptions placed online for The Atlantic in 2016. January continued to see outsized growth, up 200% year over year, though down some from December. Even single-copy newsstand sales -- the laggard of magazine sales -- jumped both in January (with a 40,000-issue reprint, due to demand) and 15% for the year.
In newspapers, The New York Times has lit the way forward. By the end of this month, it expected to have added 500,000 new net subscribers over a six-month period, unprecedented in U.S. history, moving past its recently achieved subscriber milestone. Meanwhile, its partner in surge, The Washington Post said that January generated more subscription starts than any other month, beating what had been a record-setting November, with the Post overall seeing "doubled digital subscription revenue in the past 12 months, with a 75% increase in new subscribers."
Sources said the newspaper now can count about 300,000 digital-only subscribers for the first time.
While few regional newspaper companies report much of Trump Bump -- and their diminished reporting capacity may be the culprit -- The Boston Globe just set its own record. The Globe leads all regional dailies in digital-only subscriptions, now counting more than 80,000. "We've achieved 47% of our net digital sub growth from last year already in the first six weeks of 2017," said Peter Doucette, the Globe's chief consumer revenue officer.
The Nikkei-owned Financial Times is one of the few newspaper companies that have enjoyed both Trump and Brexit bumps. The FT reported a 33% increase in new subscriptions over the normal run rate in the two weeks following the U.S. election, followed by a 20% jump for the rest of the year. Brexit more than doubled that -- a 75% increase in the month around the vote.
The Guardian saw anti-Trump partisans respond hugely, with election day providing the highest level of voluntary support in the history of the company.
There's old-fashioned subscription -- the you-give-me-the-news-and-I-give-you-money exchange -- and then there's membership. It's voluntary, a stepping up to support something that's freely available.
ProPublica also has witnessed quite a spike. In January, the nonprofit investigative journalism newsroom received $104,000 in donations, up from just $4,500 in October. In the first month of the year, 12,000 donors came forward, compared with 26,000 for all of 2016.
How much of that is the Oliver Effect?
"John Oliver was a very significant part of it, but it's impossible to quantify," ProPublica president Dick Tofel said.
"I think a lot of people have reacted to the election by feeling the need to take some form of civic action. We're flattered and delighted that they would choose helping us pursue our mission of journalism in the public interest as one such response. The consequences: We're adding seven jobs to those we had planned for this year that we've already posted, with more to come."
Public radio has paved that voluntary donation path for 40 years, and it, too, is seeing new waves of support.
New York Public Radio's WNYC saw an increase in new members of 140% year over year in the three-month period between November and January. "Sustaining" pledges -- those committing to recurring donations -- grew 163% year over year, and almost 5,000 members made additional gifts, an increase of 480% over the same period the prior year. WNYC's national syndicated "On the Media" took in 10 times its level of donation in November 2016, compared with a year earlier.
And it's not just the bigger stations that are pulling in bigger bucks.
Oregon Public Broadcasting, which operates statewide with both public radio and public TV news programming, saw a year-end upsurge, putting it 72% over 2015 in giving. Further, 40% of the donors were first-time givers, up from 29% a year earlier. "The messaging went hard on journalism and mission, " OPB president and CEO Steve Bass said.
In the heartland, Minnesota Public Radio's winter pledge drive is up about 20% year over year, and its parent company's APM Reports, its investigative and documentary unit, also saw heightened giving. Partnering with WNYC, MPR News has produced the new Indivisible program.
Overall, public radio is seeing additional support from coast to coast.
"Many stations are seeing strong fundraising campaigns since the fall," said Melanie Coulson, executive director of Member Station Services for Greater Public, a public radio support organization. "People are listening and wanting to support what they trust. Traditionally, stations do well around election season, so there's always a bump, and I'm hearing it's more than usual in many markets."
Even digital-only publishers are seeing surprising numbers.
Slate, the now 21-year-old quite independent news site owned by Graham Holdings (GHC) - Get Graham Holdings Co. Report , has been surprised by explosive membership growth for its Slate Plus offering. At its recent peak, Slate generated a thousand new members per week. Slate just passed the 30,000-member mark, rocketing up 66% from 18,000 pre-election. The $49 per year Slate Plus provides a package of early access and bonus content, but it's the ability to support its reporting and viewpoints that's driven that increase.
Twelve-year-old Voice of San Diego, a leader in local news membership programs, meanwhile, has seen a 20% increase in new members just since Election Day. Since Nov. 8, Voice has raised $263,000 in donations, up $80,000 over the same period last year. For a nonprofit rapidly trying to add to its nine-strong journalist corps, such an increased level of giving makes a big difference.
Finally, even business-to-business media has noted its own Trump bump. Atlantic Media's Government Executive, which serves federal officials, is enjoying a banner year, both in digital audience and in its sale of change-oriented editorial guides.
Beyond the Recent Numbers
The trend has provided a financial boost to be sure, but its impact extends further.
Most immediately, it stokes the confidence and the courage of journalists doing their jobs. New Yorker Editor David Remnick said he finds the public support "emboldening and encouraging." As Slate's Editor-in-Chief Jacob Weisberg put it: "It's just really heartening because it's a message back. Our readers are saying, 'You know, we recognized the significance of what you do, and we recognize that you don't do it for free.'"
Financially, the pumped-up flow of subscription dollars also signifies a major shift in the funding of news, away from a reliance on advertising to pay journalists to a point where reader and listener revenue becomes a greater part of the basic business model going forward. Here, The New York Times leads the pack in crossover, with readers now driving about 60% of revenue, up from about a third just 10 years ago. For every news organization, every new dollar provided by readers -- for subscriptions or memberships -- is one more dollar it doesn't have to scratch for against Alphabet's Google (GOOGL) - Get Alphabet Inc. Class A Report and Facebook (FB) - Get Facebook, Inc. Class A Report in the hypercompetitive digital ad marketplace.
Consider one chart that shows us that reader revenue crossover. In one picture, it tells us how the New York Times -- newly recognized by Wall Street for its crossover -- has fueled a recent surge in its stock price.
On Nov. 3, five days before the election, the publisher's share price hit a low of $10.80. It closed at $14.70 on Wednesday, a 36% gain in four months. Driven by its digital paywall, which ended free digital access in 2011, the Times began to gain more direct consumer revenue in 2011 than advertising income, and that disparity has only grown since.
(Columnist Mark Hulbert writes that Facebook is also one of six stocks that should benefit from President Trump's tax-reform proposals. Click here to see why.)
Remnick pointed to the same phenomenon.
"The subscription side is a much larger percentage of our business than it was. It used to be, I don't know, 20%," he said. "Now it's half a tank or much more than half."
While all that post-election motion is stunning, it's essential to understand what many of these companies have done in getting ready for it. Of course, they didn't expect this gush of growth. For the most part, though, they've done two things that set them up to exploit it.
The first is simple, but often overlooked. It's the content. They produce enough differentiated, originally reported news and analysis to capture readers' attentions and imaginations.
Secondly, they've built a business foundation. That's all the largely unsung paywall/membership infrastructure with increasingly sophisticated business intelligence (aka analytics) systems supporting it. Combine the two, and these news organizations were, in three words, ready to receive.
Publishers never have been considered top-of-the-class marketers. Now, they are making new efforts. The Times has asked its readers to donate, as well as subscribe. Its just-launched, give-a-student-a-subscription program has added more than 200,000 new "customers."
Further, The New York Times aims to move on CEO Mark Thompson's outsized 10 million subscriber goal, taking immediate advantage of what could be a once-in-a-generation opportunity. The company plunked a couple of million bucks into an Oscars broadcast ad, a high-stakes investment for a company still showing meager profits year over year.
In stark black-and-white, the ad's keyword: "Truth." That word, and one other, "trust," serve as the foundation of membership appeals, including one this week for American Public Media's popular Marketplace. If the "T" words lead, it's the suddenly au courant "F" word that's seen new life. "Facts" reads the Slate Plus bonus gift cap.
Then, there's the less-subtle, in-your-face approach. "We will not shut up," proclaims a recently launched Los Angeles Times campaign (six months of unlimited digital access and a combative T-shirt).
What's Driving the Surge?
What's powering subscription growth, and will it have legs?
No one knows.
"I hope it's energized more by a desire for truth than it is by some sense that there's imminent disaster," Remnick said.
It's not just idealism -- or raw anti-Trump fear -- behind the numbers. As Weisberg pointed out, "People do recognize that independent media is part of the thing that keeps us from authoritarianism, but it's partly that people are just consuming a lot of media and news content."
Remnick agreed. "My guess is that as much as I love cartoons that the bump in subscriptions is not because of that. ... Nobody's polled everybody to say the 'Why?' But I think we're also at a moment where the values of truth and the values of what the press should be at its best are not only in question, but being questioned by the president of the United States in the most uncertain and aggressive terms. And I think people, and this is part of what gives me a lot of optimism ... I don't think people want to put up with it. I think people want to know. They're not easily cowed or deceived. And I think tens of millions people think that way."
Remnick runs a "liberal-minded magazine" long known for allowing its writers to express strong points of view. He attributes The New Yorker's own surge to much more than that, though.
"The rigor has to be there. The facts have to be facts, and no bullshit allowed. ...I think readers are intelligent. They know the difference between shit and Shinola," he said. "I think people are hungry for exactly what all the cynical outlets tell them they're not hungry for.
"I think these institutions whether they're old, so-called media institutions, legacy institutions like the Times or The New Yorker or The Washington Post, or they're new and they're ambitious but they have similar values, I think they're essential to working in a democracy. I mean what could be more vital in the landscape right now than the incredibly energetic competition between The Washington Post and The New York Times?"
In fact, the audience numbers confirm that obsessive readership. Though there seems to have been a December holiday-from-Trump news break, news readers came roaring back in January. Atlantic.com's February -- at 33.6 million monthly unique visitors -- surpassed its record-setting January, the company said.
What does it attribute its readership and subscription increase to? "Politics drove this success: Five of The Atlantic's 10 issues of 2016 led with politics, including its four best-selling covers of the year," a magazine representative said.
Those top-line digital audience numbers, though, aren't what drive the reader revenue-seeking news publishers. Rather, it's engaging that top few percent of those readers, turning them from semi-regular to habituated and to paying customers.
"You know, we've really shifted our focus to loyalty, in-depth engagement," Weisberg said.
It's not the millions coming to the site every once in a while; it's the thousands coming regularly that now determine the success or failure of digital news businesses. Each news company measures its engagement differently; Slate puts particular emphasis on two groups, those who have visited eight times or more and those who have visited 25 times or more within a month. But the one number that's most meaningful: time on site.
An Echo of Watergate?
Is there any historical precedent for this subscriber boom? I wondered if Watergate -- the national crisis more than 40 years ago that first elevated both The New York Times and The Washington Post to their surpassing prominence in American journalism -- had produced a surge of its own.
The answer: not much of one. In fact, the Times' circulation barely changed between 1970 and 1974, the year in which Richard "Tricky Dick" Nixon finally helicoptered out of the White House, walking past "that old Magnolia tree planted by Andrew Jackson." That circulation: 1.45 million. It is the digital world that has now allowed the Times to double that number and for many others to form a quicker, more meaningful relationship with paying readers.