President Trump’s mocking tweets about the “failing” New York Times and its “dwindling” subscriber base miss the boost his election and early days in office are giving the company’s business.
CEO Mark Thompson stopped short today of saying Trump was the cause of a record 276,000 net quarterly growth in digital subscriptions in the last quarter of 2016 and a continued surge this month, bringing the Times’s total digital and print circulation to over 3 million. “There were other factors as well,” he said in a conference call with analysts.
“We restrict ourselves to empirical evidence,” Thompson continued, “but there has been an uptick in people’s willingness to pay.” One might expect a news lull after an election, Thompson said, “but this hasn’t been a quiet period. How long will the new administration be creating controversy? Months more, maybe years.”
Thompson added that international subscriptions have spiked as well as those in the U.S. and that the “conversion rate” of discounted trial offers to full pay is actually improving, suggesting that more than a short-term fix of serious news is at play.
Not all the Times’ financial news was good. Profits for the quarter were down slightly compared to the same period in 2015, and print advertising revenue declined 20 percent, marginally worse than the terrible third quarter the Times and other newspaper organizations reported late last year.
However strong digital circulation revenues, digital ad revenue growth year-to-year of 11 percent and other revenue including that from the Wirecutter product review site the company acquired in October, kept total revenue decline to about 1 percent.
Management said that it expects similar results for the first quarter of 2017 — strong in digital, declining in print. New York Times daily print circulation was off 4.3 percent for the fourth quarter and Sunday print down 3.5 percent.
Cost-cutting in the face of the ad declines has been the norm in the industry. But not at the Times. Though there have been newsroom buyouts and layoffs, Thompson said that the newsroom budget for 2017 will increase by $5 million, mainly to support more investigative reporting.
The company is also upping marketing budgets to capitalize on the current digital subscription opportunity and expects cost for the first quarter of 2017 to run “mid to high single digits” more than in the same period last year.
Lee Enterprises, whose newspaper organizations are mostly small and mid-sized in the Midwest and West, also reported quarterly results today. These too had a Groundhog Day flavor, matching Lee’s most recent report last year. Though digital advertising was up, total ad revenue was off 10.4 percent compared to the 2015 period and total operating revenues down 7.2 percent.
McClatchy and Gannett will be reporting in another week. That should be an indication of whether continued financial stagnation is the norm for the industry.
Neither the Times nor Lee results were a big surprise to the market. New York Times Co. shares were up 1.8 percent in midday trading and Lee Enterprises down 3.7 percent.