While remaining cautious about the year ahead, The New York Times Company reported strong first-quarter earnings on Thursday.
Digital ad revenues in the first quarter increased 2.2% from $37 million in 2013 to $37.8 million, this year. “2014 has got off to a good start,” Mark Thompson, New York Times Co. president and CEO, told analysts on a Thursday earnings call.
Among other bright spots, Thompson cited the “very successful launch of our native ad product.” Without offering specifics, Thompson said he expected the controversial initiative to provide “meaningful” revenue results going forward.
Seeking to temper revenue expectations, however, Thompson said the company expects to see “significant variability from month-to-month,” this year. April, in fact, is proving to be an especially tough month for The Times Co.’s sales department, he said.
What explains the modest outlook? This is “still a market with a lot volatility,” Meredith Kopit Levien, the company’s recently appointed head of advertising, noted on the earnings call.
While its impact on the company's bottom line went unaddressed on Thursday, it has also faced criticism over the most recent redesign of NYTimes.com. Digital subscriptions were up 39,000 up in first quarter, which represents a healthy 18% increase year-over-year, according to Thompson. The Times Co. now boasts about 799,000 paying digital subscribers.
April was a big month for The Times Co., as it debuted two new digital subscription products, along with a new native ad product for mobile. The company is targeting young users with a lower-priced digital subscription option, NYT Now, which costs $8 per month, and includes new NYT Now App for iPhone and iPod Touch.
While he said it was too early to quantify its success, Thompson said NYTimes Now was clearly exposing the publisher to a new generation of consumers.
The NYT Now subscription includes access to a curated collection of NYT content, including videos, info-graphics and slide shows, as well as content from around the Web. Consistent with how young users get their content these days, the information appears in a continuously updated News stream.
The company also recently rolled out Times Premier, which, for $45 a month, offers readers expanded content offerings, including the “Times Insider” — a behind-the-scenes look at how the newsroom creates content.
With the goal of reducing complex stories to their simplest form, the company just debuted a new site named The Upshot.
For advertisers, The Times Co. recently introduced a new in-line native ad product, Paid Posts, which is designed to appear on NYT Now before extending to the newspaper’s main news app for iPhone, iPod Touch and the mobile Web site. Cartier came on as the unit’s launch sponsor.
Overall, The Times Co. said total revenues increased 2.6% in the first quarter of 2014, with ad revenues up 3.4% and circulation revenues up 2.1%.
The company said operating profit declined $28.1 million in the first quarter of 2013 to $22.1 million, this year, due to investments in various growth initiatives.