First-quarter results from the New York Times Co. encapsulate the dramatic shifts afoot in the publishing business, as print advertising revenues tumble while digital ad revenues soar.
The topsy-turvy numbers suggest NYTCO isn’t out of the woods yet, despite fast-growing digital revenues. The question remains whether other publishers can replicate NYTCO’s relatively successful digital approach.
Even by the standards of the newspaper industry, the first-quarter drop in print was precipitous. Overall NYTCO print ad revenues plunged 17.9% from $97.9 million in the first quarter of 2016 to $80.4 million in the first quarter of 2017.
However, digital revenues jumped 18.9% from $41.2 million to $49.7 million over the same period. Though impressive by the standards of the newspaper industry, the digital ad growth was more than offset by the decline in print ads, yielding an overall decline of 6.9% in total advertising revenues.
Most of the NYTCO’s digital ad revenues came from display, making up 87% of the total, but classified and “other” revenues (presumably including native ads) are growing fast, up 52.3% year-over-year.
NYTCO also continued to see growth in digital subscriptions, as the total subscription based increased by 348,000 over the course of the quarter to pass 2.2 million. Digital sub sales drove an 11.2% increase in circulation revenues, from $218 million to $242.4 million. This offset ad losses for a 5.1% increase in NYTCO’s overall revenues, from $379.5 million to $398.8 million.
In proportional terms, circ now contributes 60.7% of the publisher’s total revenues, versus 32.6% for ads. That represents a sea change from the beginning of the decade. In the first quarter of 2010, for example, circ made up 40.3% of the total compared to 53.2% for ads.
Recent financial results from some other big publishers reflect a similar reality, without the consolation of fast digital ad growth.
Gannett saw total print ad revenues fell 17.7% in the first quarter, while digital ads (excluding acquisitions) edged up just 2.3%. Gannett’s digital subscription business is growing fast but from a smaller base: at the end of the first quarter the USA Today publisher had 250,000 digital-only subs, up 72.6% from the same quarter last year.