The Upshot Emerges as Potentially Lucrative Franchise at The Times

News Explainer Gathers Steam Among Readers, But Paper Has Done Little to Capitalize On It With Ads

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A graphic from The Upshot.
A graphic from The Upshot.
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The New York Times' 20 most-popular stories of 2014 included two from its news-explainer section The Upshot: "Where Are the Hardest Places to Live in the U.S.?" (No. 10) and "Is It Better to Rent or Buy?" (No. 19).

Not bad for a newcomer.

The Times introduced The Upshot last April as a digital section to fill the void left by Nate Silver's departure. Mr. Silver ran the popular FiveThirtyEight blog, which was responsible for 20% of the Times digital audience in the run-up to the 2012 election.

The Upshot hasn't reached that level yet -- in October, during the run-up to the most-recent election, it brought in 5% of the Times traffic . But the section is emerging from the swamp of news-explainer sites like FiveThirtyEight, which ESPN now publishes, and Vox.com, where data-wonk-wunderkind Ezra Klein calls home, to become a potentially lucrative franchise for the Times. Last month, New York magazine even called The Upshot a reason to love New York.

But the Times has done little to wring money from The Upshot. Although display ads run in the section, they're often the more inexpensive ad units sold using automated technology. Paid Posts, the Times more expensive native ad product, have not appeared on The Upshot.

Ken Doctor, media analyst for Newsonomics, thinks that's a missed opportunity. "The tone and substance of Upshot would seem to lend it well to Paid Posts," he said. "They could work well, given explainer context, for Times ad sales."

Flagging ad revenue
The Upshot's momentum comes as the Times looks to boost flagging revenue. Print advertising declined 5.3%% in the third quarter. Digital ad sales increased sharply -- thanks largely to native ads -- but they weren't enough to offset print losses. Total ad revenue fell 0.1% during the quarter.

The Times, which reduced its newsroom headcount by about 100 people through buyouts and layoffs in December, said this week it would introduce a new monthly print section on men's style, a niche that could attract fashion, luxury, grooming, tech and auto advertisers.

Advertising isn't the only way The Upshot could become a profit center for the Times. The section could also help attract younger readers because of its lighter tone, according to Mr. Doctor.

Paid subscribers to the Times' digital-only products numbered 875,000 at the end of the third quarter, good for $42.8 million in revenue. While these numbers have been rising, there's concern among Times executives that subscriber growth is reaching a plateau. The company is now looking to cheaper, app-based subscription products, such as NYT Now, to attract more paying readers.

For that reason, a free, ad-supported Upshot app might make sense. "It could be a valuable millennials-targeting product, serving as an on-ramp for a full Times subscription," Mr. Doctor said.

A Times spokeswoman said there are no plans for an Upshot app.

More video this year
Upshot posts cover a lot of ground: politics ("Why Romney's Not the Right Candidate to Challenge Bush From the Right"), healthcare ("How Medicaid for Children Recoups Much of Its Costs in the Long Run"), economics ("Why You Should Be More Optimistic About Wage Growth") and everyday life ("How to Make Yourself Go to the Gym"). It often leans on graphics to help tell these stories. And graphic editors are often responsible for story ideas, their bylines appearing beneath Upshot posts.

"There is clearly a large audience for very substantive journalism -- you can write about poverty, inequality and diet and health and attract a lot of readers," said Upshot Editor David Leonhardt, who leads a staff of about 15 people. "We also feel good that we've done some stuff that's clearly meant to be fun."

Upshot stories appear in the main New York Times app and in the print edition on Tuesday, Thursday and Sunday. About once a month, a story from The Upshot will make the coveted front page, according to Mr. Leonhardt.

But The Upshot is designed as a digital-first entity that maintains a strong relationship with print. Upshot staff devotes more time and energy to the digital product, Mr. Leonhardt said. The Upshot, for instance, sends an editor to the Times' 10 a.m. Page One meeting -- which focuses more on the Times digital report -- but rarely dispatches anyone to the 4 p.m. meeting.

Mr. Leonhardt said video will be a priority in 2015. The Upshot has produced a few short videos, but not enough, according to Mr. Leonhardt. "We're eager to do more," he added.