New York Times posts record subscription rise

Rise in digital readership pushed up revenue despite slide in ad sales

New York Times Co. reported its biggest quarterly increase in digital subscriptions ever, pushing revenue up slightly, despite a steep slide in advertising revenue that is expected to accelerate in the second quarter.

The coronavirus pandemic is creating a host of challenges for media companies, many of which are seeing a rise in digital readership but are also facing a sharp drop in advertising, which tends to be one of the first expenses cut by companies looking to preserve cash in times of crisis.

Chief Executive Officer Mark Thompson said advertising fell rapidly toward the end of the first quarter and was expected to fall between 50% and 55% in the second, “with limited visibility beyond that.”

He noted that the company’s business model, “with its growing focus on digital subscription growth and diminishing reliance on advertising, is very well positioned to ride out this storm and thrive in a post-pandemic world.” The Times said it added 587,000 net new digital subscriptions in the first quarter, compared with an increase of 342,000 in the previous quarter. Of those, 468,000 signed up to the paper’s core news offering and 119,000 for lower-cost digital products such as its cooking and crossword apps.

Total subscription revenues in the second quarter of 2020 are expected to increase in the midto high-single digits in percentage terms compared with a year earlier, with digital-only subscription revenue expected to increase in the high-twenties.

Net profit was $32.9 million, or 20 cents a share, up 8.9% from $30.2 million, or 18 cents a share in the same period a year earlier.

Revenue rose by 1% to $443.6 million, with increases in subscription and other revenue— primarily from the television series “The Weekly” and licensing revenue generated by Facebook News—more than offsetting the drop in advertising revenue.

Overall advertising revenue declined 15% to $106.1 million, while subscription revenue rose 5.4% to $285.4 million and other revenue increased 21% to $52.1 million.

The Times said it had more than six million total subscribers including digital and print at the end of April, and more than 5 million digital subscribers in total. Mr. Thompson said that there would likely be some job losses in coming months, reflecting efforts to cut costs, but added that total head count is expected to increase by year’s end.