Nesianetwork.id - This is Success Story of The New York Times’ $100M Side Business. Print media is dying, and the internet killed it. Daily newspaper circulation has dropped by over 50% since 2020, and roughly two newspapers go out of business every week.
Now, amidst all this chaos, the New York Times hasn't just weathered the storm of declining newspaper sales, but their revenue has actually been growing since 2016. And while many attribute this to "digital transformation," beneath the surface lies a secret, a strategic move that most haven't noticed.
And the answer probably isn't what you're thinking. Because it has nothing to do with journalism - but it has everything to do with how we shop. But before we get there, we need to talk about this so-called "digital transformation." In March 2011, the New York Times announced that it would be launching digital subscriptions.
This meant that you could read up to 20 articles on their site each month and have access to some of their apps. And adoption was actually quite good. Their digital subscription revenue has been growing year over year for over a decade. And today, it brings in around a billion dollars per year in revenue.
Now, that digital subscription has evolved into what the New York Times CEO, Meredeth Kopit Levien refers to as a "digital product experience". And this "experience" can be bought for around $6 per week to gain access to news, games like Wordle, the Cooking App, and more. But this 'digital product experience' narrative was far from the whole story.
Under the hood, something else was brewing — a pivotal change that kick-started near the end of 2016. You see, while the rest of the print world continued sinking, The New York Times' revenue grew a notable amount for the first time in over a decade. And while much of this growth is because of more digital subscriptions, the part that no one's really talking about is this "Other" revenue source which has nearly tripled since 2016, making up roughly 10% of their total revenue today.
So what's this mysterious 9-figure side business all about? Well, according to the New York Times' 2022 annual report, they state that "Other revenues primarily consist of revenues from licensing," and right after that, "Wirecutter affiliate referrals," which was not so coincidentally acquired in October 2016, right before they began a new wave of growth.
And in their Q2 earnings call from that same year, they noted that "other revenues" came in higher than guidance, specifically calling out "higher Wirecutter affiliate referrals." Now, affiliate referrals are commissions that are generated through affiliate marketing. And this is when a company is compensated a commission in exchange for referring leads or sales to an affiliate merchant.
This is the primary monetization method used by the Wirecutter. To better illustrate what this looks like in action, say you want to buy an air fryer. You'll probably go to Google and search for "best air fryer." In fact, your search is just one of 123,000 that happen in any given month in the US alone. Now, you click on the link to the New York Times Wirecutter because it ranks high and you know the brand. Then you scroll through the article, click some links to Amazon, and then make a purchase based on some Amazon reviews and your budget. Nothing out of the ordinary here.
But what you might have missed while shopping is that the links you clicked have a tracking tag attached to them. This is called an affiliate link. And when someone clicks this affiliate link, it tells Amazon that the Wirecutter referred those shoppers to them. And when those clickers make a purchase, Amazon is going to give the New York Times a cut of that sale. How much of a cut? Well, according to Amazon Associate's commissions table, an air fryer falls into the "kitchen" category so it pays out 4.5%.
So for a $100 air fryer, a standard affiliate would get around $4.50. And while this may not sound like a hundred million dollar business, the scale at which the New York Times is doing affiliate marketing is absolutely bonkers. And I'll show you exactly how big they've taken this site soon, but first, it's vital that you understand why affiliate marketing was and still is the perfect add-on business for the New York Times.
And there's two main reasons. First: It doesn't require a lot of cash to start or operate. In fact, there are plenty of solo bloggers who are running multi-six-, seven- and even eight-figure affiliate marketing sites – perfect for a company that was probably being a bit more cash-conscious. And second and perhaps the most important part: the New York Times is one of the most authoritative brands on the planet.
They have around 100 million followers across their social accounts. And from a search engine standpoint, their website is just outside of the top 100 most powerful domains, making nytimes.com an optimal home to attract substantial organic traffic. So basically, The New York Times has all three ingredients to make an untouchable affiliate site: a content and editorial team that can produce top-notch content, the domain and audience to quickly generate tons of traffic, and a brand name that's well-known and trusted, which I'm sure contributes to higher conversion rates. And they knew all this and capitalized on it. Let's look at the journey of the Wirecutter.
So, pre-acquisition, thewirecutter.com was getting around 1 million monthly visits from Google search. Then in October 2016, the site was acquired for a reported $30 million. Now, their first act of order was to do what they do best: scale content like crazy. And within just one year from the acquisition date, they more than doubled content and tripled organic traffic. And they continued to scale content and rank it in Google on thewirecutter.com domain.
Then in May 2020, the New York Times would take a risk that not many marketing professionals would do with a site that's getting five million monthly visits from Google and generating tens of millions of dollars. They migrated all of the content from thewirecutter.com to the New York Times domain, dropping their traffic to zero. And if you've ever dealt with migrations, you know that they almost always come with problems. But something absolutely crazy happened once the migration was done.
They restored all of their traffic on the New York Times domain and by November that same year, they had hit over eight million monthly organic visits from Google. And using their brand and authority, they've tripled search traffic to nearly 15 million monthly visits from Google search alone.
So with 15X the organic traffic since the acquisition and likely higher commission rates with affiliate merchants, I'd say that their 30 million dollar bet paid off big time. And today, the New York Times' Wirecutter ranks for just about every "best product name" query in Google like "best air purifier," "best gifts for dad," "best wireless outdoor home security cameras," and thousands more.
Now, unfortunately, we can't put an exact dollar amount on the Wirecutter's revenue because, even if we knew the affiliate numbers, that's not the whole picture. And the reason for that is because some Wirecutter visitors almost certainly end up buying the New York times main cash cow: the digital subscription. And other digital subscribers are probably buying the subscription because it includes full, unrestricted access to the Wirecutter's content.
What we do know is that when the New York Times took over the Wirecutter, an already successful business, they continued to publish high-quality reviews at scale, leveraged SEO as their primary marketing tactic to get free and consistent visitors to their site, and used the affiliate marketing model to passively generate revenue, creating this amazing, yet valuable eight to nine-figure side business.
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