November 1, 2017

The New York Times Co. is suffering the same miserable print advertising losses as others in the industry — down 20 percent year-to-year for the third quarter.

But the Times, unlike the rest of the public news companies, still achieved revenue growth — 6 percent for the quarter — thanks to another surge in digital subscriptions and a strong period for digital advertising. Net digital subscription growth from the second quarter was 154,000 — 105,000 for the basic news product, the rest for crosswords and a new cooking vertical.

Digital advertising grew 11 percent year-to-year, but CEO Mark Thompson said that gains are uneven and the fourth quarter is more likely to be flat or down slightly.

As expected, the "Trump bump" effect that had the company adding 200,000-plus subscribers in quarters earlier in 2017 has cooled off. In his remarks to analysts, Thompson chose instead to tout the "sheer breadth" of Times coverage as an attraction to subscribers. "We're like a multi-ocean navy."

His examples included the Weinstein and O'Reilly sexual harassment exposes and reporting on hurricanes, the Mexican earthquake and the Las Vegas shooting.

Print circulation is not so robust as digital — down 5.3 percent daily and 2.6 percent Sunday compared to the same period in 2016. But price increases have offset those declines and kept revenue even.

Thompson has set an eventual goal of 10 million digital subscribers from the current 3 million — and expects continued growth in international markets and better conversion of mobile-only readers to carry the next round of increases. The Times also has new paid subscription digital verticals in the works.

An analyst asked whether price increases for digital subscriptions may be coming soon. For right now no, COO Meredith Kopit Levien replied. The effort remains focused on growing the base, and boosting prices would slow that. The cohort that came in at introductory rates before and after the election is converting to full price at the same rate other trial subscribers have — allaying any worries that those big gains were temporary.

With additional revenue growth from its product recommendation service, Wirecutter, the company recorded net operating income of $33 million on revenues of $387 million, a margin of 8.5 percent.

Not surprisingly, New York Times Co. stock is the top performer among newspaper companies, up 34 percent for the year to date (though down 5.4 percent for the day in noontime trading).

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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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