What’s six letters long, cost several million dollars and can ruin your morning if you mess it up? If you answered “Wordle”, give yourself a pat on the back. For those of you still scratching your heads, Wordle is a viral puzzle game which enjoyed a meteoric rise since its launch in October last year. Its explosive growth in users (and cultural relevance) has culminated in its acquisition by the New York Times – the latest strand of an ambitious and carefully considered growth strategy. Their next big bet could help them to dominate the media landscape – but could they be looking for a bigger, more ambitious prize?
We have been in the thrall of Wordle-mania since the end of last year, and the wave shows no sign of breaking. From a mere 90 users on November 1st 2021, by the end of January 2022 it has captured over 45 million Wordle converts – enough to convince the New York Times to make an offer “in the low millions of dollars” to acquire it from its (almost) eponymous inventor, Welsh software engineer Josh Wardle.
Wordle’s success has been attributed to many things – from a viral-friendly Twitter integration that lets “players brag about their success in a spoiler-free way” to its counter-intuitive design principles (limiting players to a single game per day) which fly in the face of the received wisdom that infinite scrolling and maximal engagement time are better for business. The breadth of its appeal extends from machine learning evangelists to utopian advocates of human-centric design – and seemingly, everybody in between.
Like all things in our accelerated age, the wholesome joys of Wordle could only remain untarnished for so long. Since being bought by the Times, various allegations have cropped up, from the conspiratorial (they’re secretly making it harder) to the absurd (some – ahem – “sensitive” words have been removed from the game’s central dictionary), to the downright scandalous (cheaters looking up the day’s answers to chase lexicographical clout on social media – with players in New Hampshire, Vermont and Rhode Island allegedly sitting atop of the league of shame).
What makes this story really interesting is how Wordle fits into a wider strategy to diversify the NYT’s digital membership. In January the NYT shelled out $550m in cash to acquire sports journal The Athletic, adding a cool 1.2 million paying subscribers in the process. That’s on top of purchasing audio long read specialists Audm for an undisclosed fee, and the Wirecutter in 2016 for $50m.
This red hot M&A activity has taken place against the backdrop of a legacy media industry slowly adjusting to the shock of the new. The decline of the newsstand is well documented, with US print ad spending all but collapsing, from an all-time high of $67bn at the turn of the millennium to just over $13bn in 2021. For legacy publishers, the pain doesn’t end there. 72.4% of the global digital advertising budget has been swallowed by five companies, with Facebook and Google alone comprising 52.7%, and Amazon and Alibaba inventing new ways to play. For the NYT and other brands of a similar vintage, the old revenue streams withered on the vine, leaving them to fight for the crumbs left over by the new kids on the block.
To reverse this decline, the NYT’s leadership bet big on digital subscriptions. News content was, of course, a cornerstone of its plan to acquire 10 million paying subscribers by 2025. But the X-factor came from its recognition that many customers were just as interested in the other tentacles that make up the Times’s wider cultural reach. NYT Cooking, Games, Wirecutter and Audio all provide distinctive platforms away from the main newsbrand that independently leverage content, communities and continuous commerce to understand and monetise their narrowly-focused and highly engaged audiences. In this context, the power of Wordle becomes clear. In Q4 2022, the NYT added 375000 new digital subscribers – of whom 46% subbed to elements outside of the core news product.
All in all, things are looking rosy down on Eighth Avenue. Since buying the Athletic, the Times has broken through the 10 million subscriber mark, well in advance of that 2025 deadline and spearheaded by the growth of non-news propositions. Its share price has grown over 215% since 2017. So what next? We at Manifesto believe that it could go one of two directions.
The first, and probably the more likely of the two, is the cautious approach: a continuation of the plan to double down on digital domination. Think more acquisitions to bolster non-news subs, investment in acquiring international subscribers as headroom in the US dwindles, and most ambitiously, a bundled option that consolidates the different elements of the Times’s many offerings in a single marquee subscription. An ecosystem of interconnected news, gaming and lifestyle apps that mutually reinforce engagement is a powerful play to drive lifetime value as the focus switches from acquire and grow to stabilise and retain.
Much has been made of the potential for various apps – from Instagram to Klarna to finally get American and European consumers to adopt a so-called ‘super app’. To date Asia, Africa and Latin America have led the way on super app adoption – but could the NYT’s combination of brand power and diverse assets help it to break new ground? In its current formulation, probably not – but it might only be one bravura acquisition away.
Innovation influencer Scott Galloway has made a bold call that Twitter is a prime target for acquisition for brands looking to use social media to add new dimensions to its operating platform. His suggestions for likely buyers – Salesforce, Paypal and Stripe all make sense from an availability of capital standpoint. In terms of strategic fit however, the Times could be an even more apposite choice of owner. Through Twitter, NYT’s discrete and bundled offerings cutting across news, culture, gaming and more, could be bolstered with Wordle-style social sharing options, embedding engagement throughout the digital experience to drive customer acquisition, international market penetration and long-term retention at a scale that is currently unimaginable. The financial details of such a move might be extremely tricky to navigate, and the brand values of the NYT and Twitter may well be misaligned. But it may also make the Times a bona fide contender for the first media and publishing super app to emerge in North America and Europe.
Juan Pablo Ortega, co-founder of LATAM-based super-app Rappi has warned about the siren call of over-consolidation: “As you try to do too many things, you end up not being the best in all the things you do. How do you offer all these products without losing that focus?” The Times has walked the tightrope with skill up to this point, creating a diverse offering without compromising its identity. Wherever it heads next, it needs to maintain focus on exactly what it wants to be: a dominant force in a refreshed niche for legacy media brands, or a beefed-up contender, willing to go toe-to-toe with the new order of tech industry titans.
Whichever way it goes, we at Manifesto will be fascinated to see how it pans out. Up to this point, the NYT has successfully executed some (but not all!) of the best practices we recommend in our Engagement Economics playbook. If you’re interested in how to win in membership, download our engagement economics report!
© 2023 Manifesto Growth Architects Manifesto Growth Limited, is a company registered in England and Wales with a registered office at 9 Castellain Road, London, England, W9 1EY.
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