New York Times Co. Reports Revenue Growth as Digital Subscriptions Rise
Posted May 3, 2018 2:30 p.m. EDT
Updated May 3, 2018 2:31 p.m. EDT
The New York Times Co. added 139,000 digital-only subscribers in the first quarter of 2018, a 25.5 percent increase from the same period a year ago, helping to fuel total revenue growth and offset a decline in digital advertising.
The company said Thursday that about 40,000 of the new subscribers came from digital products like the cooking and crossword apps. The gains helped push the company’s total digital-only subscribers to roughly 2.8 million.
The company said total revenue was about $414 million, a 3.8 percent increase from the first quarter of 2017. Subscription revenue increased 7.5 percent to about $260 million, accounting for nearly two-thirds of the company’s total revenue.
“Retention of our core digital news product remains a very encouraging story,” Mark Thompson, the company’s chief executive, said during an earnings call with investors. “We continue to retain the postelection cohorts, some of whom are now well over a year into their subscriptions at least, as well as earlier cohorts.”
Despite the growth in subscribers, however, the company saw a 6 percent decline in digital advertising revenue from the same period a year ago. It was the first time since the second quarter of 2016 that digital advertising declined. In the first quarter of 2017, digital advertising increased 19 percent, part of the so-called Trump bump.
“The character of our advertising model, with its increasing reliance on strategic commercial partnerships and often large individual campaigns, means more lumpy results than was the case, say, three years ago, as individual partnerships and campaigns come on and off stream,” Thompson said.
Digital advertising revenue was $46.7 million, making up 37 percent of the company’s total advertising revenue.
Thompson said he expected a continued decline in digital ad revenue into the second quarter but was confident that it would recover in the third quarter of 2018.
“In a rapidly evolving digital ad marketplace, we believe that our differentiated offering, the safety of our environment and the growing desire of the world’s biggest brands to associate themselves with The Times position us for success,” he said.
In a bit of a surprise, print advertising revenue stayed stronger than in years past, with Thompson calling it “the best since the third quarter of 2015.” With just a 2 percent decline year over year, the loss was significantly smaller than in the first quarter of 2017, when it slid by 18 percent from a year earlier.
The adjusted operating profit, the company’s preferred method of assessing performance, was $55.5 million in the quarter, about 10 percent higher than the $50.2 million of a year ago.
Operating costs in the first quarter were $378 million, nearly $11 million more than the first quarter of 2017, largely because of increased compensation costs.
Looking ahead, Thompson said the company was focused on new ways to expose its work to different audiences, specifically with television and film.
“First up at the end of May is an independent Showtime documentary, where The Times newsroom and our coverage of the first year of the Trump administration is the subject,” Thompson said. “And, we have our own projects in the works, including a recently announced agreement with Anonymous Content that will help us accelerate moving Times journalism into film and TV.”
He pointed to the success of the podcast The Daily as an example of how The Times can adapt to different formats.
“The Daily podcast demonstrated our ability to translate the quality, the authority and the humanity of Times journalism in audio and we think we can do the same in television,” Thompson said. “We think this could be a way both to generating revenue but, again, getting Times journalism in front of new audiences and further the reputation of The New York Times.”