Value Creation can seem random
How a business creates value that it can charge money for can appear to be random. A lesson from the New York Times.
In September 2019, my wife and I got ourselves a New York Times digital subscription that costs $4 / month. This was a promotional price and included all-access to everything NYT offered. News, the crossword and their excellent Cooking app.
The Crossword and the Cooking app seemed like add-ons to the core News feature. After all, it is a news publication. I didn’t think much about it and started enjoying the app.
As the year went on, my wife’s and my true user behaviour emerged. We almost never read the NYT news (it’s relatively left leaning and is full of US politics anyway) and get most of our value from…..The Crossword (wife) and the NYT Cooking app (me).
Our promotional rate of $4 ends on 8th September 2020 and the full price goes to $12. Normally, I would automatically cancel subscriptions like this, but here’s the funny thing : The wife gets so much enjoyment out of doing The Crossword everyday and I look at the Cooking app at least 2-3 times a week (I cook fairly regularly). The Cooking app sends you weekly dishes and you can add it to a digital recipe book for use later on.
What interests me the most is that the Cooking app and the Crossword collectively cost $8.47 / month and we’re happy paying that and removing the News subscription (costs $12). NYT has increased its ARR (Annual Recurring Revenue) from my household and created something that makes us stick around much longer.
This is interesting because the NYT is not in the business of “Cooking books” or “Crosswords”. And I personally get more value from these than from their core news product.
Go figure.