July 27, 2017

Who are these hundreds of thousands of new digital subscribers The New York Times has added over the last year?

Without getting specific about numbers, CEO Mark Thompson and Chief Operating Officer Meredith Kopit Levien sketched this picture for analysts in an earnings conference call today:

  • Those joining as subscribers the last nine months skew somewhat younger and include a slightly higher percentage of women than the existing base.
  • The international portion of the total — now more than 2 million — is growing faster than the domestic.
  • The newest subscribers are good about paying up. Kopit Levien said that the “Trump bump” wave at the end of last year and beginning of this “has been retaining at least as well as previous cohorts” and a higher proportion are paying right as they subscribe.

Thompson said that the larger international mix increases demand for “an active news cycle.” Despite the much-discussed reduction in copy editing posts in a current wave of buyouts and layoffs, the Times expects higher newsroom costs as it steps up 24-hour-a-day postings.

For the second quarter of 2017, the Times added a net of 93,000 digital subscribers compared to the same period a year ago. That was way down from the net gain of 300,000 in the first quarter.

But by way of perspective, 93,000 is roughly the total paid digital circulation McClatchy reported last week at its 31 regional news organizations.

The Times does not project future digital subscription growth, but Thompson hinted it might be more modest in the near term. “We’ve come off the peak of the Trump bump and are back to organic growth.” Though that remains very healthy, he added, “I’m not yet satisfied with the underlying rate at which we are growing.”

Print subscriptions continue to slide — down 3.8 percent daily year-to-year and less than 1 percent Sunday. However, because of rate increases at the beginning of 2017, print circulation revenue stayed even.

The second quarter was comparatively strong for advertising as well with digital ad revenue growth offsetting an 11 percent print decline in ad revenues compared to the same period in 2016 for a gain just under 1 percent.

But Times execs said good timing of some new campaigns helped that result. They cautioned analysts not to expect the same ad numbers for the balance of the year but rather “a decrease in the mid to high single digits.”

The company was profitable for the quarter, but modestly so, with net income of $15.6 million on revenues of $407 million — a profit margin of 3.8 percent.

The strong results were better than analysts had predicted, and New York Times shares were up 6.5 percent at $19.55 in midday trading. Since the start of the year, New York Times stock has gained a surprising 45 percent at a time when most other newspaper related stocks have been flat or falling.

This financial performance again pretty much gives the lie to President Trump’s go-to Twitter epithet, “the failing New York Times.”

And I won’t resist the obvious irony — that the single biggest factor in that success is reader demand for aggressive and voluminous coverage of the new administration and all other things Trump.

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Rick Edmonds is media business analyst for the Poynter Institute where he has done research and writing for the last fifteen years. His commentary on…
Rick Edmonds

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