May 4, 2022

The New York Times Co. offered a familiar story Wednesday in its earnings report for the first quarter of 2022: The number of its digital subscribers continues to surge; print and digital subscriptions now total 9.1 million.

Digital news subscriptions grew by 312,000 from the last quarter of 2021.  CEO Meredith Kopit Levien attributed that result largely to interest in Times coverage of the Ukraine invasion along with improvements in new subscription sales and retention.

The company has stopped reporting subscription results separately for its other products. But Kopit Levien said that the company’s acquisition of the popular Wordle game (currently free to play) has attracted “10s of millions of users.” Enough of those sampled other Times games to drive the best quarter of paid subscription growth ever for that product line.

When the Times acquired The Athletic on Feb. 1, that added another 1.1 million subscribers and that number continued to increase over the next two months.

Other highlights from the company’s earnings release and conference call with analysts:

  • Like the rest of the newspaper industry, the Times is suffering from steady declines in the number of print subscriptions. Daily circulation was down 9% compared to the same quarter in 2021 and Sunday was down 8.2%.
  • Conversely, print advertising was strong, especially with the return of live entertainment, a big category for the paper. Digital advertising was soft as tech companies and others cut back.
  • The company spent $550 million to buy The Athletic, about half of its cash on hand before the purchase. The sports site has been losing money and will continue to for at least two more years. Kopit Levien said the first strategies for improved performance will be bringing the Times’ “playbook” to optimize circulation practices and ramp up advertising. Subscription bundles that include The Athletic, now a standalone product, will be offered soon.
  • The Times now offers 19 subscriber-only email newsletters. Readers who open at least one are substantially more likely to continue as paid subscribers after introductory rates expire and then to renew.
  • Total revenue grew 13.6% year-to-year to $537 million compared to a 17.8% increase for operating costs. Kopit Levien said that disparity reflects investment in news staff and costs of integrating and improving business functions at The Athletic. The company remained profitable but less so than in the 2021 first quarter.
  • International digital subscriptions now make up 19% of the total.
  • Inflation and other economic issues should not have much effect on the Times’ business, Kopit Levien said. “Long-term we’re optimistic,” she said, and on track to a goal of having 15 million subscribers by the end of 2027.

The news had little effect on New York Times share price, which was up about 1% in afternoon trading. Times stock has more than doubled in value over the last five years but is off about 15% since the beginning of this year.

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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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