Buffett’s $351M Publishing Bet

Greetings, Tyler. Welcome to the pod. Hello. Hello. All right. We ready to jump in and talk about the New York Times? Ooh. Yeah. Yeah. Small publication. So yeah, some, some news about it too. Warren Buffett decided to throw $350-ish million as an investment in there. And that's 6 years after he sold all his newspapers for $140 million.

Oh yeah.

Isn't that interesting? Yeah. The exact number's $351 million. So Warren Buffett, kind of a smart guy. Think he knows what he's doing. And so what this, you had suggested this podcast and the more I thought about it, the more I thought, you know what, this is a perfect model for what to do in sort of the digital landscape today and looking at what the New York Times has done over the last really 15 years till today and essentially copying what they do, which if you're in the publishing space, you can absolutely do what they are doing on your scale. It doesn't matter if you're news or like magazine or niche publisher, B2B, there there are lessons here. And so what I wanna do in this episode is I wanna unpack what went wrong for the New York Times, what they did to correct it with their meter paywall, and what they're doing today and how you can apply that to your publication. I think there's a really powerful lesson here. And Warren Buffett, I think he's onto something.

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All right. Just a little sort of a personal thing. When The New York Times started their metered paywall, which is back in 2011, I remember looking at it thinking, huh? And when we got our first publisher about 10 years ago, said, hey, I need a paywall. We essentially modeled LeakyPaywall after what the New York Times is doing with their metered paywall. We stole like an artist, like, or whatever the expression is. Like, we looked at that like, you know what, the hard paywall not working so well at that point in time. We're gonna just, you know, copy what, what they were doing and build, build our version of a paywall. And it worked and they were onto something. So, all right. So let's, let me share my screen a little bit here and we'll go here and take a look at the New York Times. They're doing a lot of things right. But I want to go back a little bit and just look at some, some numbers. So they They were essentially, if we go back to some time ago, '03, this 2003, they were running really an ad-based revenue model, right? So print, certainly some digital advertising was the bulk of their revenue and things crashed out back in '08. There was the financial crash in '08 and things really took a turn for the worst. So in '09, they were, they were suffering. If you look at this chart, there's a big drop down to '09. So in 2011, they turned on their metered paywall. And what was that? That was where they decided, okay, we're going to give away 20 articles for free, right? To the, you know, and this was, this was just back in the day, 20 articles for free per month. To any random user that would visit the site. And then after 20 articles, you'd have to pay. And what happened? Well, it started working, right? And so what they said is, you know, let's, let's nurture the readers, right? Let's nurture them into an engagement. We're going to get their email address. I mean, we're going to get— give them free content. They're going to get their email address later, but they're going to— you're going to get a chunk of free content. And then you're gonna have to pay. And so their dedicated digital readers did that. They did that exactly. If you look at the curve from 2011 through— this one goes through '22, and the numbers are still going up. You'll see that this had some small growth. And then in '17, it really started taking off and it's been jumping, jumping, jumping. But what's interesting is that the digital subscriptions block, right? Like this block has grown exponentially and it's now, and now reader revenue is, I think it's like 60, over 60% of their total revenue comes from readers. So it's been quite an amazing story. Now I'm not going to go into like what kind of shape they were in as I got some notes here, But what I do want to do is share with you the sort of the final numbers. So in 2011, they were doing about $47 million in digital subs. In 2012, that went to $100 million. In '22, so 10 years later, they were at $979 million, which is 42% of their total revenue. '25, so last year, 3 years after '22, they hit $1.4 billion in subscription revenue, 69% of their total revenue. So they absolutely, yeah, they absolutely flipped from advertising focused. They saw those numbers were declining. They turned on a soft paywall and started engaging their readers that way. So, um, the other milestones. So 2015, they hit a million digital subscribers. I remember when that happened. '22, they hit 10 million subscribers. In '25, it's 12.8 million. So the goal for them, I think they stated, is in '27, they want 15 million subscribers. Okay. So Buffett is now betting on the New York Times. He's saying that this model works. Right? I mean, that, that's a, that's a, that's a bold statement and he's put some money down, which is crazy. Okay. So in 2011, they started with 20 free articles per month. In 2012, they dropped that to 10 free articles per month. Right? That's a, that's a, that's a tightening. And this is, there's this sort of like this, this trend here that they're doing. In 2017, they Cut that from— they went from 10 to 5 free articles per month. That was the Trump bump back in 2017. And in 2019, can you guess what happened? What did they introduce?

The free registration.

The free registration. Exactly. Bingo. They put up a registration wall in 2019. So now if you go to their site and you and you go look at, let me go pull this. I'm just going to show this real quick. If you go to their site and you, and you're not logged in or anything, you just, you're looking at stuff and you hit an article, you'll see that you get zero free articles, right? And you have to create an account and you'll get a few more articles. And of course you'll get their newsletter. So I've been running this for, for a while now. And because it works. For them. And but what they, what they've done is they have, they started softly. I mean, 20 free articles per month today sounds ridiculous, right? But they were the pioneers in this.

Engaged person ever to get through that count, right?

Right. Exactly. You know, even 10 sounds ridiculous and 5 is ridiculous today. Really, 1 is kind of where you, where you need to be. One free article per month. But so what they did is they, they took their time and they learned and they, and they, they tightened. And what I would suggest to any publisher listening to this is you need to do exactly the same thing, right? So if you, if you have a paywall and you're, you're, you're letting 2, 3, 4, 5 articles through before you show somebody a registration or paid subscription, you need to start tightening that, right? And you, and what you do is you tighten a little, you look at what happens. Okay. Subscriptions go up, registrations go up, and, and then you tighten, you further tighten and tighten and tighten until you build that confidence to get to zero free articles, which today most of our publishers are not at, at all, but some are. And because they've done a good job building their list and, uh, and they're protecting their, their brand from AI and all that good stuff. If you're not running a free registration, you should be. And that would be— this is an opportunity to take a look and say, hey, okay, let's start engaging. Let's get a free registration in just the way the New York Times is doing it, and not hard to do. And we'll start building that email list of engaged readers. And again, with the registration, you know, you can show that up after 1, 2, 3, 4, 5 articles. We recommend if you're gonna, if you're going to be cautious, and you're going to start with 5 free articles that you keep an eye on and start tightening it, go to 4, go to 3, go to 2, go to 1, build that confidence. And what you'll see is that we talked about this a lot, but you know, Google sending you 1.7 visitors, or one, each visitor that lands on your site is looking at 1.7 articles per visit. On average, right? If you look at your Google Analytics, which means on that second article, you need to pop up the free registration or the paid subscription, depending on kind of where you're at, hopefully the free registration and off you go. So, um, you tighten, you measure, you tighten, you measure. It's an, it's, this is like active participation. You can't just set it up and stop looking. You have to You have to look at what happens to your email list. You have to look at what happens to your paid subscribers. And what, what we see on our end is as soon as you start tightening, you know, by definition, you're bumping conversions. People that are hitting your upgrade messages, whether it's free or paid, like the reason they hit that message is because they want to read that article. It's simple as that. So your chance of getting them to register or pay goes up as you tighten. But it does require confidence. And this is what the New York Times did over a long period of time. They did this before anybody, I mean, back in 20, I gotta show this 'cause I hate to throw Digital Tonto under the bus here. But back in 2011, I found this article. It says, 5 reasons why the New York Times paywall will fail. And why it's really dumb. Like, you know, and I don't want to make fun of Digital Tonto because everyone said this. This wasn't just them. All the pundits were like, yeah, this is ridiculous. This is stupid. This will never work. You know, news should be free. Yeah. Yeah. Yeah. Digital news should be free. Just stick to advertising, but it wasn't working. Right. So the New York Times, just, just what they did is they just said, you know what, the numbers are not lying to us. Advertising is dropping. We need to do something or we're going under. And they ended up, if you dig, they borrowed money just to survive. This is literally a turnaround story. And now Warren Buffett gave him $351 million, right? Yeah. Okay. Where was I? I'm kind of blabbing on here a little bit. Okay. Do we talk enough about the free registration flywheel?

We never talk about that too much.

We know. Yeah. Yeah. Um, yeah, get that free registration up there. New York Times is doing it. Build your list, tighten it up. Um, if you're afraid of AI, set your, the, the wall to zero, uh, free articles, make it a hard paywall. Right. And then, but have the free registration there. So when somebody hits an article, they can just, you know, register and get to that article and get on your newsletter. And then your newsletter shoots that reader back to your site over and over and over and over again, seeing the next upgrade messaging, the next targeted messaging, and then their chances of paying for subscription go up and up and up over time. Okay. All right. Let's talk about something else that the New York Times has done incredibly well. And you're kind of looking at it here on the screen and that is, um, the product upsell, right? So not only were they leaning into reader revenue and building their email list and all that, but they have gotten incredibly good at creating products and upselling you into that product. Right. So we as a household subscribed to New York Times years and years ago and been enjoying it. And then Colleen was like, a few years ago, she's like, oh, we should really get their recipes. I hear they're good. And then, wow, we should really get their recipes. Let's get their recipe. You know, it takes a little while. And then finally it's like, all right, our recipes are boring. We need something new. And so boom, we're, we just we just paid for, I think we had now paid for the all-access pass, which includes recipes, games, there's Wirecutter, there's audio. So, and now Colleen, she's hooked on like Wordle and the New York Times games that are out there. So they have brought us in from different angles and upsold us to, what I thought was the final tier until I went and I looked at the New York Times website today.

It's a never-ending buffet of tiers, huh?

Now it says that I can upgrade to a family plan for my whole family.

You never had to pay, you're not supposed to.

Oh my God. Anyway, I laugh, but they got me, right? And they got a lot of people according to the data. And it's smart, right? You're, you're okay. Yeah. Switch to all. It says big button right here. It knows I'm logged in, it's got my account here, is to switch to all access family. I don't know, God, how much this is gonna cost, but you know, I suppose, you know, maybe my kids get older and they want access to the New York Times and all their things, and then I'll be pressured into just pressing that button, right? Yeah. Wow. Yeah, wow is right. I thought I was done, but I am clearly not done. So now I, you know, to be fair, I think the New York Times is kind of at the— I think they're at sort of the cap of how many products they can package, you know, and not cause, you know, confusion, but they've been really smart about it and they really pushed the envelope and they've, and they've, they've got it down. Okay. So, now what, what can, what can you do right now? Let's, let's take this and talk about product, creating upgrade plans for you as a publisher and maybe a different niche or, or whatnot. And I just want to show you a couple examples. I don't want to go too deep, but, um, so ad-free, right? Uh, this is, this is pretty easy to pull off. Um, this is a publisher in Sweden, Samnit. Uh, they've been with us for years and what they have is a, uh, 99, uh, uh, kronor, uh, Swedish crowns, uh, ad-free plan versus a $69. Um, their regular paid subscription plan and they're, you know, 10% of their revenue is ad-free. It's a little over 10%. It's been running for a long time. And it's a, so it's, that's a good chunk of revenue to offer that. And it shows you how, you know, we kind of started hitting this YouTube Premium world or Netflix Premium where you don't want ads to be anywhere. So ad-free plan is an upsell, right? You have paid subscribers. What's next, right? If you're heavy on ads, do ad-free. Yeah. California Fly Fisher, they have a checkout for a book. Well, it's basically the winter 2026 issue is what they're, when you're doing checkout, you click the box and it updates your price and now you get the winter 2026 issue on checkout. These things work. Small Boats did this also on checkout with, they had a holiday edition at the end of every year. I don't know if they did it last year, but if you check a box, it adds like $20 to your checkout. And then they mail you this, this issue. And you could do this with a PDF, you could do this with, with like the next example would be, you know, if you're a regional news, you do, you know, best doctors, best lawyers, best dentists, You know, best of series, best businesses. If you're B2B, you know, you could kind of lean into the best, best of businesses kind of thing. Hey, check the box and you get the, you get the PDF or whatever, right? And your people are in a buying mode. It's a great place to get folks to, to upgrade. Small Boats Monthly, we haven't talked about in a little bit, but they, what they do because they're in sort of an enthusiast hobby niche is they let paid subscribers post unlimited classifieds, right? Now, in this case, it's not really an upgrade plan, but it could be, right? If you want to post classifieds, you just check out in the classifieds subscription level, and now you're going crazy selling all your gear, right, to the, to the right audience. So there's, there's, there's, there's more examples. Maybe we'll do a separate pod on just how to upgrade your subscriber base, but I wanted to throw a few examples out there to get you thinking about how you go from, you know, you're nurturing readers from, you know, from random traffic. They're registering for free, they're getting on your newsletter, your newsletter's pushing them back to your content, your upgrade messaging is popping off, and then once they pay, there are other opportunities. I mean, we even talked about events or or other things, but there are other opportunities to level up that reader into something paid. And so what I would suggest is just think of one thing, keep it simple. Think of one thing that you could produce. Maybe you already have it. Maybe it's archive access. If you're a magazine publisher, this is kind of a big deal. You may have decades of archival PDFs that you could assemble and create a nice bundle for. There are a lot of things you can do, but in any case, do what we did, copy what the New York Times is doing, right? Get that registration wall in place, put your meter at however generous you want it to be, but then tighten, tighten, tighten, tighten over time. And what you'll see is you'll just see things grow and you'll gain confidence and then And then when you get that AI bug in your head and you're like, oh, we got to lock stuff down. Okay, time to lock stuff down. But you could still grab email addresses and build, build that list. And, you know, the thing that the New York Times has definitely found, that we found with our publishers, is that when you get this flywheel, this sort of publisher flywheel in place, we call it, is you drive so much more traffic back to your own site. So you can, you can get off the social and SEO train. You don't have to worry so much about you know, what's happening on platforms that you have no control over whatsoever, because now your email list, it's your owned first-party data list and you're just firing people back at your website as the email list grows. Whew. Okay.

All right.

I said a lot. All right. Anything else, Tyler? Does that kind of COVID it? That was a, that was a really good, I think this, this was a really good one to cover. I mean, they are. New York Times is the bellwether, the tech bellwether, what publishers should be shooting for, I think, with their platforms. Yeah.

And if nothing else, $350 million should be a very good vote of confidence from Mr. Buffett in terms of this model working. And yes, it also works. At all stages, whether you're in a small town, regional area, you know, national, whatever. Of course, the scales are different, but the model still works across the board. So nice.

And you would know. All right, Tyler, thanks, man. Catch you next time.

Thanks for listening to the Paywall Podcast. If you'd like to get in touch to discuss subscription strategy, go to leakypaywall.com. See you next time.