market folly

We're posting up notes from the Sohn San Francisco 2018 investment conference.  Next up is Gil Simon of SoMa Equity Partners who pitched a long of New York Times (NYT).


Gil Simon's Sohn San Francisco Presentation: Long New York Times (NYT)

•    Conventional views: news is a commodity, consumers won't pay for news, advertising only way to scale
•    SoMa's view: consumers aware of 'fake news,' will pay up for trustworthy, differentiated content, most info still free but quality journalism worth paying for, direct subscription model better aligns publishers with consumers. Analogous to music industry streaming shift
•    At the very early innings of the evolution of the new business
•    Company with legacy, credibility and scale and has been around 170 years
•    Believes internet will go from headwind to tailwind for high quality journalism
•    2011 – implemented their first paywall (with 20 stories a month for free)
•    Shifting business model to creating journalism worth paying for
•    Broadening content to deep research, more multimedia content (The Daily by NYT is one of the top podcasts in the country
•    Very few publishers have crossed the chasm to monetizing print newspaper content – only FT, WSJ, Washington Post, and the New York Times
•    Recently tighter paywall to 5 free articles per month driving conversion to paid subs
•    70%+ subs are digital subs
•    80% of print subs have a digital login
•    See more revenue going towards subscription
•    Opportunity for margin expansion from ~12% today to 20% by 2022
•    Can’t be viewed as a legacy print media company; Underestimating future earnings leverage based on fixed costs of the newsroom
•    Believes that it is a double to $40-$50 in 2 years


Be sure to check out the rest of the Sohn San Francisco 2018 presentations.