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October 23, 2017

New York Times' Breakthrough 'The Daily': How It Fits Its Digital Business Transformation

Within nine months of its launch, it looks like The New York Times has more than a success on its hands. “The Daily” is becoming a phenomenon, an out-of-the-blue hit that is forcing print-based business leaders to think anew about the revolutionary power of digital audio. Further, as the leading edge of The New York Times’ now dozen-strong audio unit, it may provide a growing line of revenue still badly required to overcome print ad loss.

“The Daily”‘s numbers impress. The five-day-a-week, 20-plus-minute podcast just passed a big milestone: 100 million downloads, we can report here for the first time, with weekday daily downloads growing 34% since June. “The Daily” keeps its place in the multiple Top 10 podcast charts. This week, it ranks No. 4 on iTunes, behind the splashy debut of the Los Angeles Times’ true life crime tale of “Dirty John,” which tops the charts, with 5 million “listens” counted this week.

In August, 3.8 million unique visitors listened to “The Daily,” the Times said. Able to obtain ad rates equaling video ad sales, the Times now plans to build a “franchise” around The Daily’s success

 

First published at The Street on Oct. 17, 2017

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“It just really feels like a franchise,” said Sam Dolnick, assistant masthead editor at the Times, who oversees the paper’s now-expanding audio team as part of his wide-ranging digital/mobile advocacy.

Dolnick painted the larger picture of the Times becoming an audio player: “What is it like to take a Daily lens to the world of culture or to big interviews outside of politics?

“I think you could picture all kinds of shows.

“Some of the shows that get the biggest response are more narrative than newsy. Can you blow that out and do a narrative series? A ‘Serial’ with an eight-, 12-week episode narrative. What does it look like for ‘The Daily’ to expand into that? … That are almost miniature ‘This American Life.’ We’ve built a flexible enough frame that I think lots and lots of different things can fit inside of it.”

Already, Andy Mills, who came to the Times from audio pioneer RadioLab, is at work on a “big narrative project.”

That ambition is still in the planning stage, but already “The Daily” franchise has broadened. In late summer, the Times spun off “The New Washington,” a Saturday interview with the Schumers, Rubios and Flakes. Early next year, “The Daily” will add a sixth day weekend day to its weekly output.

Further, expect “The Daily”‘s numbers to take another leap. Within the next several weeks, Times readers will be able to access “The Daily” directly from their apps and browsers without using a separate podcast app. The newsy Daily often receives prominent placement on the well-used app. Now, reduced friction — the enemy of much news consumption — should further boost listening time.

The Program

Executive poducer Lisa Tobin, an alum of leading public radio station WBUR in Boston, came to the Times last year and has helped lead its audio invention. As radio people, she said, “We all have these experiences of having spent so many hours just trying to find a person who fit the profile to be a voice on a subject. It’s just so much of the work of a producer in radio. It can take hours. It’s like searching for a needle in a haystack.”

At the Times, though: “You walk through the newsroom, and it’s like a candy store. Take your pick. That part’s unreal. There’s just a relentless supply of amazing stories to be told in this building.”

Storytelling, of course, means more than reporting. It means connecting with readers. Emotion, then, is one of three E’s of “The Daily”‘s formula-in-formation.

“The Daily” host Michael Barbaro has established a new Timesian relationship with its readers.

“Our grand authoritative voice that can be intimidating and can be inaccessible,” Dolnick acknowledged. “Now, for the first time, you’ve got a friend at the New York Times. Michael is there every day, and he’s like, ‘Come on in.’ I’ll show you around. I’ll find the most interesting parts for you. I’ll ask the questions that you want to ask.”

“The Daily”‘s audience numbers provide one sense of its success. Another metric is in its correspondence.

“We have an email address and these letters pour in. They are just a steady stream of heartfelt notes,” Dolnick said. Probably a dozen a day. … If you go to Michael’s Twitter feed, it is most certainly a daily outpouring of gratitude.”

The second E: expertise. More than 120 Times journalists have joined Barbaro to chat on the topic of the day. As reporters join in for a quick chat, readers tap into knowledge, experience and context at the touch of a finger.

“Michael is the center of that in many ways,” Dolnick said. “You hear the kind of family that has grown up on ‘The Daily,’ the audio, the recurring characters. Rukmini Callimachi. She’s on there all the time, and she sounds amazing, Matt Apuzzo with his reporting into Russia investigation and the Justice Department, Maggie Haberman [the Trump Whisperer], of course.”

That relationship engagement reinforces “engagement,” the third E. Engagement has been tougher to measure via podcasts than through digital reading, but the Times’ numbers and its voluminous email feedback tell us that the company has struck a new nerve among the news-obsessed.

“Downloads are the most important metric for our advertising business, since that’s what we use to price our sponsorships, but ultimately, we’re more interested in monthly unique users as a way to judge audience size and engagement,” said Samantha Henig, who co-heads the Times audio team.

In the midst of it all is Barbaro, an unlikely breakout personality, adept at getting his colleagues to round out their written stories.

“I don’t know that I’ll ever be comfortable being a personality because it never occurred to me that the way that I talk and the way that I respond to people, or how I listen, would become something that people would focus on,” Barbaro said.

“I grew up much more watching television interview shows. I mean, whether that was Charlie Rose or Larry King. I don’t know that there’s any kind of a straight line from watching those people to how I was. I think my form of hosting and listening is the one I practiced as a print reporter for 15 years. I mean, the same mode of listening. It’s just there’s a microphone in front of me and kind of an audience listening.”

An 11-year veteran of the Times newsroom who has worked on its business, metro, business and politics desks, the 38-year-old Barbaro’s persona is one of a colleague, and that makes all the difference in an interview show like “The Daily.” It’s peer-to-peer conversation, within trusted bounds — and one, we can note, is edited, usually down by half or more from the full talks.

Serving as both host and managing editor of “The Daily,” Barbaro can listen intently to a Times correspondent who may conclude an informed view on the North Korean nuclear threat or the Las Vegas massacre by saying, “That’s the big question.”

“What’s the answer?” Barbaro can unhesitatingly reply, the voice there of the listener who wants informed viewpoint, context and summation.

Numerous parents can lay claim to “The Daily”‘s success — the intangible of “natural” host Barbaro, increasingly sophisticated production values hard to find in a daily podcast, in-your-face Times promotion on its news products — but it is that expertise that absolutely differentiates it.

One less easily recognizable key to the success: a new mix of talents.

As Tobin said: “My partner is Samantha Henig, who’s been here for five years and is the only person on this team who doesn’t come from audio, but there’s no way the team could function without her. Not just because of what she does and the fact that she’s brilliant, but she knows how the place works. I think Sam sees it as his job to make sure that audio is positioned in a way where it’s not marginalized and it is at the center of things, and it feels like there’s this sort of powerful combination.”

In turn, Barbaro credited Tobin with much of his successful adaptation to sound.

“This job requires an incredibly active form of listening. And it took me a while to understand that. And there were moments where I’d look across the table at Lisa, and she would basically be looking at me saying, ‘Don’t look at me. Get in the interview. Stay in the interview.’ And I think, you know, she had a wonderful hand gesture where her two hands would come together and point down to get in there.”

The Business

The Daily’s audience reach is now persuasive. The bigger business question: What will that mean to the Times’ digital revenue transition? CEO Mark Thompson said his company remains on course for its 2020 goals, of doubling digital revenue, set in 2015.

Are podcasts a nice-to-have or a business driver?

Take that third E. Engagement acts as the key metric for building the Times’ digital business.

“Engagement is our key metric for the business,” said Laura Evans, senior vice president of data and insights at the Times.

It’s simple, in that sense. Get both current subscribers and those with the likeliest “propensity” to subscribe further engaged with the Times brand, and the reader revenue business will continue to thrive. Now claiming 2 million digital news subscribers, the Times aims for 3 million — and then, in some post-2020 year, 10 million.

That’s why we hear Barbaro say to “Daily” listeners, “You’ve asked what can you do to support ‘The Daily’? Subscribe to the Times.”

“We do think there’s a connection between subscriptions and ‘The Daily.’ Michael’s call-outs are the first step of that,” Dolnick said.

The Times uses that 3 million unique listener number about “The Daily.” How does it figure it, given the difficulties of counting podcast audience? “It’s an estimate based on unique IP address and user-agent combinations. That’s one way of measuring web traffic uniques, too. But with web traffic you can also use cookies or tokens, which we can’t do for podcasts,” Dolnick said.

Further, there’s a new advertising/sponsorship angle to be further worked in 2018. Currently, “The Daily” offers one spare midroll ad opportunity and is selling it out at video-ad-like rates of $25-per-thousand customer rates. As both “The Daily” audience and programming expands, the Times will see new revenue opportunities. I’d also believe that it may be able to bring its T Brand branded content business to audio.

Then, finally, there’s events. At the Times, as well as other top publishers, events have formed a third, and stronger, leg of revenue, after reader and ad revenue.

“We think lots of people would like to see a live performance of ‘The Daily,'” Dolnick said.

This “franchise,” then, is now being taken more seriously as a business as the new year approaches. The audio team, based in the newsroom but having good liaison to the business side, now numbers 16, with more hires planned for next year.

Executive editor Dean Baquet has overseen accelerating change at the Times in his 3-1/2 years in the top job. He never expected he would be running a radio station, but his staff is racing into the audio future.

“I don’t get much credit, except for getting out of the way and not meddling with a good idea,” he said. “Kinsey Wilson [he Times’ executive digital leader until June] and Sam Dolnick get the credit among senior leaders. And one of the smart things they did was to find an expert [executive producer Tobin] who could do audio, rather than pick someone inside the traditional newsroom.”

Many eyes in the daily newspaper industry watch the Times’ embrace of audio. All publishers seek greater engagement, leading to greater revenue. Two large chains, Gannett Co. and McClatchy Co., have now embraced podcast initiatives; expect more activity in 2018 as the burgeoning world of podcasting moves from testing to operational.

As news companies look at the potential, they’ll like the profile of the new customers they may be finding.

Dolnick said that the Times’ “audio audience skews younger, more racially diverse and more female than our readers online or in print. I think the next generation of readers, their first touchstone, their most meaningful touchstone with The Times, will be ‘The Daily.’ That’s a big deal that didn’t exist just a year ago.”

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