The New York Times continues its steady digital subscription growth, executives said Wednesday, reporting financial results for the third quarter. Digital subscriptions were up a net of 180,000, the same as the increase last quarter. Including print, the Times now has 9.3 million subscribers.
The company also continues to deliver an operating profit margin of just under 10% – $51 million on revenues of $548 million.
But the growth is no longer primarily in subscriptions to news alone. Rather, the Times is heavily pushing what it calls internally “the bundle.” That is an all-access product that also includes Games and Cooking verticals, audio, the Wirecutter product information site and now The Athletic, which the Times purchased for $550 million in January.
CEO Meredith Kopit Levien said that the bundle costs roughly 50% more than a news-only digital subscription. Beginning this quarter, she added, the company plans to increase the price of single-product subs to news or other products, hoping to “compel people to take the bundle.”
The news cycle itself varies, she said, affecting subscription numbers. Storylines like Trump’s campaigns and administration or the pandemic or the aftershocks of January 6 no longer dominate, and that growth in news-only subscriptions is softening.
The shifting pattern of growth raises the question of whether the Times can still be described as a news company. Investor information service Zacks characterized it in an earnings preview story Tuesday as a “diversified media conglomerate.”
In his inaugural column for Semafor October 18, co-founder Ben Smith (with some hyperbole) wrote that the Times is experiencing “an identity crisis.” He asked, is it morphing from “a news company expanding into tech products” to “a tech company with an ancillary news product?”
Kopit Levien said news remains most important, in a conference call with analysts. The first pillar of the company’s strategy is still to continue “leading in news,” she said. Second, the Times, with its varied offerings seeks to help users “make sense of their lives (and pursue) their passions.” The third element of the strategy is to put the two together in the bundled package.
She said that the Times continues to invest in modest growth of the newsroom – now numbering about 1,700. But operating costs are growing – by 9.5% in the third quarter – mainly because of efforts to integrate and develop the money-losing Athletic.
Last quarter, the Times stopped reporting the number and growth of news-only digital subscriptions. That continued Wednesday with Kopit Levien saying that Games was the fastest growing of the single products and that Wirecutter is also having a strong quarter.
The bundled subscriptions now total more than 1,000,000 and, despite the higher price, the Times hasn’t had problems with getting readers to move from introductory offers to full price and then retaining them.
In other aspects of the company’s financial performance, advertising revenues held steady year over year, despite the uncertain macroeconomic outlook and declines in the tech category.
The Times expects advertising to be off in the fourth quarter but that the company will still be profitable, even with losses at The Athletic offsetting growth in the core business.
That’s an improvement on a previous forecast, and Times shares were up 8% in midday trading.