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The New York Times posts a US$14m Q1 loss as it grapples with falling print revenue.
NEW YORK: The New York Times Co reported a $14 million net loss for the first quarter of 2016 as it continued to grapple with how to offset falling revenue in print advertising.
Digital subscriptions remained a bright spot for the company, showing robust growth. In its earnings release on Tuesday, the company said it added 67,000 net digital-only subscriptions in the quarter, the most in a quarter since the end of 2012.
The Times now has roughly 1.2 million digital-only subscriptions for its news products. Including its crossword product subscriptions, which accounted for about $2 million in revenue in the first quarter, the company counts close to 1.4 million digital-only subscriptions. By the end of the year, it expects to have more than 1.5 million digital-only subscriptions.
“This was a very strong quarter for our digital subscription business,” Mark Thompson, the company’s chief executive, said in an earnings call with investors. “The rate at which we are adding subscriptions is continuing to accelerate.”
The net loss for the quarter was roughly the same as in the first quarter of 2015. Total revenue fell about 1%, to $380 million, from $384 million in the first quarter of 2015.
Circulation revenue increased roughly 2%, to $218 million, as growth in digital subscription revenue and an increase in home-delivery prices offset a decline in print copies sold.
The Times has a daily print circulation of 590,000, and 1.1 million on Sunday. Revenue from digital-only subscriptions increased about 14%, to $54 million, from $47 million in the first quarter of 2015.
Advertising revenue remained a trouble spot, falling about 7%, to $140 million. Print advertising revenue dropped 9%, and digital advertising revenue fell about 1%, to $42 million, a figure that represents about a third of the company’s total ad revenue. The company took a $41 million loss related to the announced closing of a paper mill in Maine.
“We remain bullish about our strategy,” Thompson said, “and believe that our timely pivot from traditional digital advertising towards branded content and marketing services, video and more seamlessly integrated ad formats on both mobile and desktop will deliver growth in the second half of 2016.”
The Times announced last week that it was planning to close its editing and prepress print production operations in Paris, which would result in the elimination or relocation of up to 70 jobs. It also said last month that it would invest more than $50 million during the next three years in an ambitious international digital expansion plan.
“These two announcements — demonstrating a willingness to invest substantially in digital growth, while applying rigor and realism to the economics of our mature print platforms — illustrate the approach we are taking everywhere,” Thompson said.
Adjusted operating profit, the company’s preferred method for assessing performance, decreased to $52 million in the first quarter, from $59 million in the year-ago period.
“We believe there is considerable scope for further savings in the company, and we will be going after it in the coming months,” Thompson said.