New York Times Posts Growth in Subscribers -- WSJ
August 09 2018 - 3:02AM
Dow Jones News
By Benjamin Mullin
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (August 9, 2018).
Digital subscriptions continued to be the main driver of growth
at New York Times Co. in the second quarter, but customer additions
slowed and digital ad revenue fell, weighing on the company's top
line.
The news publisher posted a 1.8% rise in total revenue, boosted
by a 4.2% increase from a year earlier in subscription revenue to
$260.6 million. The Times added 109,000 digital news subscribers,
41,000 of which came from the company's Cooking and Crossword
products.
Growth in the company's digital-only subscribers, however, has
slowed. The Times added 139,000 digital subscriptions in the first
quarter, and 157,000 in the fourth quarter of 2017. The Times, like
many news outlets, benefited from increased demand for news in the
wake of the 2016 U.S. presidential election.
Mark Thompson, chief executive of New York Times Co., said
Wednesday on a call with analysts that the second quarter is
typically a soft one for digital subscriber growth, but that was
less apparent last year because of the heightened interest in news
after the election. He was cautiously optimistic about the 2018
U.S. midterm elections providing another bump in subscriptions.
"We're living in unpredictable political times," Mr. Thompson
said. "And although every journalist here thinks it's going to be
an incredibly interesting and important set of elections, we're
going to have to see how the audience reacts to it."
New York Times shares were down 5% in early afternoon
trading.
Digital advertising revenue decreased 7.5% in the second quarter
to $51 million, owing to a smaller audience and a decline in
digital creative services such as those offered by the paper's T
Brand Studio, which develops custom advertising campaigns for
marketers.
Mr. Thompson said some of the slowdown in digital subscriber
growth for the second quarter can be attributed to a decision to
curtail marketing on Facebook. Like other news organizations, the
Times took issue with Facebook Inc.'s decision to categorize paid
promotions of news articles together with political advocacy. Mr.
Thompson said conversations with Facebook on that front have been
productive.
Print advertising revenue fell nearly 12%. In total, the company
reported advertising revenue of $119.2 million, down almost 10%
from the year-earlier quarter.
Overall revenue for the second quarter increased to $414.6
million from $407.1 million a year earlier. Net income rose 51% to
$23.6 million, compared to $15.6 million in the year-earlier
period, when costs were higher due to severance payments.
Subscriptions now account for nearly two-thirds of the company's
revenue. Many news organizations are leaning more heavily on
subscription revenue as the advertising business becomes
increasingly unreliable, including on the digital side. All
publishers are competing fiercely for ad dollars against tech firms
such as Facebook and Alphabet Inc.'s Google.
Factoring out last year's severance costs, the Times' adjusted
operating costs in the quarter increased 3.7%. That was primarily
the result of higher marketing and printing costs.
(END) Dow Jones Newswires
August 09, 2018 02:47 ET (06:47 GMT)
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