February 6, 2019

It is almost certainly a coincidence that the New York Times released its fourth quarter 2018 financial results the Wednesday after the Super Bowl, but, as expected, the report turned out to be a sort of victory parade.

Once again, the Times grew its paid digital subscription base, gaining 265,000 for the quarter to a total of 3.4 million digital subscribers. Of that, 172,000 were for its news site, while the rest accounted for its crossword and cooking verticals.

At a time when weekly layoff and buyout programs have become common elsewhere in the industry, the Times added 120 journalism positions over the course of 2018. That brings its newsroom total to 1,600, the highest ever. The number is likely to rise in 2019 and beyond.

And there is lots more expansion on tap. Executives told financial analysts in a conference call Wednesday that the company will roll out a parenting site and a new set of games for the “curious and intelligent.”  

The Weekly, a video adaptation of The Times’ industry-leading podcast, The Daily, will debut in June. CEO Mark Thompson said that The Weekly is already profitable on a cash basis even before the launch, since it was commissioned by the FX cable channel and Hulu streaming service.

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For The Times’ main business, the report was a highlight reel:

  • Digital advertising revenue surpassed print advertising in the last quarter of 2018 (a first), and total 2018 advertising revenue grew year over year for the first time since 2005.
  • The company is seven-eighths of the way to a five-year goal of growing digital revenues (most from subscriptions) to $800 million by 2020, so that number is likely to be easily achieved.
  • The Daily now has more than a million listeners and a “very successful ad business,” COO Meredith Kopit Levien said.  She added that is “more customers than we ever had for weekday print.”
  • Events, rent to tenants, commercial printing and the product recommendation site, Wirecutter, grew revenues by more than 50 percent in 2018.
  • The company was solidly profitable for the quarter and year. It has $826 million in cash on hand and only $254 million in debt.

Still, there was some suggestion of trouble ahead. Continuing the trend of recent quarters, weekday print circulation was down 9.6 percent and Sunday 6.5 percent. That suggests some resistance to ever-increasing prices, now more than $1,200 a year outside the New York-metro area.

Also, the digital sub growth is partly fueled by introductory prices as low as $1 a week (compared to the earlier norm of half off). And a price increase, not yet specified, is planned for later in 2019 from the current $180 a year for basic service and $300 for all access, including cooking and crosswords verticals. That will be the first since the company started selling digital subscriptions seven years ago.

Thompson described the Times’ paywall as “porous” — the number of free articles per month allowed per user might be loosened during an event like the midterms, which is likely to attract new readers and potential subscribers.

As in earlier calls with analysts, Kopit Levien said the company has particularly focused recent marketing efforts on “the top of the funnel” — that is, identifying occasional readers who could become subscribers — and in building daily engagement among those who do subscribe.

Only 16 percent of digital subscribers are outside the United States, leaving “a very big opportunity” to grow that market, Kopit Levien said.

Including print, the Times now has total paid circulation of 4.3 million.

“When you consider that 130 million people come to us (monthly)” she added, “that’s how we will get to 10 million” paid — the company’s target for 2025.

New York Times Co. stock has done very well compared to the rest of newspaper public companies. Its market valuation is now more than twice that of Gannett. Shares were up 12 percent in late afternoon trading.

Correction: The original version of this story misstated the annual rate for a digital subscription. We regret the error.


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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…
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