‘New York Times’ warns of ad sales drop after upbeat first-quarter results
The New York Times warned of a steep fall in its advertising sales in the current quarter after beating Wall Street’s profit and revenue estimates on Wednesday, as it added more subscribers in a period dominated by heavy news coverage around the COVID19 pandemic.
The Times, which posted the largest increase in quarterly new digital subscriptions in its history, has focused on this area for several years to stem losses from its print subscription platform and to lower its dependency on ad revenue.
But advertising sales have been unpredictable and the sector was one of the hardest hit as companies across industries slashed ad budgets to save cash to buffer the sharp drop in business due to global lockdowns. Major ad agencies such as Omnicom,
Interpublic, WPP and Publicis cut salaries and furloughed employees.
First-quarter advertising revenue, which accounts for less than a fourth of total revenue, fell 15.2% to $106.1 million, and the company expects advertising revenue in the current quarter to slide between 50% and 55% from the year-earlier period.
“The Times’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,” Chief Executive Officer Mark Thomson said.
However, on a conference call the company said it does see cost reductions that will likely lead to some job losses in the coming months, adding it expects a comparatively small number with no job reductions in journalism.
In the quarter, the company added 587,000 net new digital subscriptions, pushing digital-only subscriptions to more than five million. “This was despite the fact that we are allowing audiences to access the majority of our coverage related to the coronavirus outside of our pay model,” Thomson said.
It expects digital-only subscription revenue for the current quarter to increase in the high-twenties from last year. (Reuters)