Activist Fund Secures 7% Stake in NYT, "Improving Revenue Structure with Subscriber-Only Products"

[Image source=Reuters Yonhap News]

Activist hedge fund ValueAct Capital has acquired a 7% stake in the prominent American newspaper The New York Times (NYT). The fund announced plans to improve the revenue structure by aggressively launching subscriber-only products.

Bloomberg reported that in a letter sent to investors on the 11th (local time), ValueAct Capital disclosed securing a 7% stake in NYT and expressed its intention to participate in management. The goal is to improve the revenue structure of NYT, which is facing management difficulties amid the crisis in the newspaper industry.

The plan is to generate revenue by launching subscriber-only products such as bundled services that offer various services together. ValueAct Capital stated, "Aggressively launching subscriber-only products will be key to NYT's growth," and mentioned that the offerings could include not only news but also crossword puzzles, games, cooking, and the affiliated sports media outlet 'The Athletic.' Their own research also showed that the customer value of bundled products is 2.5 times higher than that of simple digital subscribers.

Market research firm Insider Intelligence analyzed that NYT's advertising revenue in the second quarter of this year fell by 2.4%, indicating difficulties for digital media business models reliant on advertising. NYT, which has been focusing all efforts on digital transformation, currently has about 9.2 million paid subscribers.