New York Times weathers ad declines
Media company said profit more than doubled amid lower sales
New York Times Co. said thirdquarter revenue fell slightly, as strong subscription growth was more than offset by a steep advertising decline partly caused by the continued impact of the coronavirus pandemic.
The media company posted a 13% rise in subscription revenue, with digital subscriptions accounting for a larger revenue share than print subscriptions for the first time in the company’s history.
Chief Executive Meredith Kopit Levien said digital subscriptions are “not just the central engine of the Company’s growth, but on its way to being our largest revenue stream.” The Times said it added 393,000 net new digital subscriptions in the third quarter, down sharply from a gain of 669,000 net new digital subscriptions in the previous quarter. Of those, 275,000 signed up to the paper’s core news offering and 118,000 came from lower-cost digital products such as its cooking, games and audio products.
Ms. Kopit Levien said the Times gained two million digital subscribers over the past year. “The news cycle certainly played a role,” she said in a statement. In a call with analysts Thursday, she expressed confidence that the paper would continue to grow even if the news cycle changes. “It’s hard to imagine that we’re entering a quieter period for news any time soon,” she said.
Overall, revenue declined 0.4% to $426.9 million (U.S.), with subscription revenue accounting for $301 million. Advertising revenue fell by 30% to $79.3 million, with print advertising dropping by 47%. Revenue from other units, which include commercial printing and live events, slipped by 2% to $46.7 million.
Net profit more than doubled to $33.6 million, or 20 cents a share, from $16.4 million, or 10 cents a share, in the yearearlier period, due in part to lower sales and marketing expenses.
The pandemic has affected many newspaper companies, with print advertising and single-copy sales having fallen sharply, reflecting reduced consumer spending.
The company said it expected its total subscription revenue to rise about 14% in the fourth quarter, driven by a 35% gain in digital-subscription revenue. It also predicted a 30% drop in g revenue in the same quarter as the effects of coronavirus continue.
Operating costs at the Times declined 3.5% to $387.3 million, “largely due to lower print production and distribution and advertising-servicing costs, which were partially offset by higher digital-content delivery and journalism costs.”
Sales and marketing costs decreased 21% to $50.6 million, due largely , as well to “lower as lower media advertising sales costs.” General and administrative costs increased 2.2% to $51.1 million.