NYTCO Revenues Slip On Print Declines

The New York Times Co. is widely regarded as leading innovation in the American newspaper industry, but can’t seem to buck the trends afflicting many of its less prestigious brethren, judging by the latest quarterly results, announced on Tuesday.

Specifically, continuing declines in the company’s legacy print advertising revenue are canceling out promising, but still modest, growth from an array of digital products.
 
NYTCO’s total revenues slipped 0.6% from $391 million in the second quarter of 2013 to $388.7 million in the second quarter of 2014. The drop was due entirely to a 6.6% decline in print advertising over this period.

The print decline more than offset a 3.4% increase in digital advertising, from $40.1 million to $41.5 million, resulting in an overall ad decline of 4.1% from $163 million to $156.3 million.  
 
In terms of specific ad categories, national advertising fell 6.5% to $120.7 million. This drop was offset somewhat by an 8% increase in retail ad revenues, to $20.3 million, and a 1.2% increase in classified revenues, to $15.4 million.
 
Circulation revenues, which include sales of the company’s various digital subscription products, edged up 1.4% from $207 million to $209.8 million.
 
While the print ad decline isn’t particularly surprising, NYTCO acknowledged that growth in digital circulation revenues has been slower than hoped, especially following the launch of three new subscription products: NYT Now, NYT Opinion, and Times Premier.
 
Overall, NYTCO saw its digital subs increase by 32,000 in the second quarter, a slower rate of increase than the 39,000 net new subs added in the first quarter.
 
NYTCO president and CEO Mark Thompson stated: “We’re encouraged by the reaction of users to the products, especially the high consumer satisfaction levels we’re seeing with the NYT Now app. But, while we expected the portfolio to take time to build, we want to accelerate the rate of growth in subscription sales, so over the coming months, we will refine some of the offers and the way we market the portfolio to accomplish this.”

During a conference call, Thompson also conceded that some customers might be “confused” by the sheer number of new offerings, all of which offer different types of content at different price points.
 
With print advertising and circulation revenues likely to continue declining, and digital advertising posting modest growth at best, NYTCO has identified digital subscription products as a key source of future growth. But after a promising start in 2011, growth slumped as the core online audience had mostly converted to paying subscribers.

While the company added 234,000 new digital subscribers in 2012, that number fell to 120,000 additional subscribers in 2013. The new digital subscription products are intended to reach a wider audience, including younger readers, with customized content options.
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