Over a three-month period dominated by the coronavirus pandemic and a slowdown in advertising, the New York Times for the first time reported quarterly revenue that owed more to digital products than to the print newspaper. As much of its staff worked remotely, the Times brought in $185.5 million (€156 million) in revenue for digital subscriptions and ads during the second quarter of 2020, the company announced on Wednesday. The number for print revenue was $175.4 million. The company added 669,000 net new digital subscribers, making the second quarter its biggest ever for subscription growth.
The Times has 6.5 million total subscriptions, a figure that includes 5.7 million digital-only subscriptions, putting it on a course to achieve its stated goal of 10 million subscriptions by 2025.
In a statement, Mark Thompson, the chief executive, called the company's shift from print revenue to digital "a key milestone in the transformation of the New York Times".
Attracting subscribers willing to pay for online content is a high-wire act that practically every company in the news business is trying to pull off. The Times started charging for digital content in 2011, when asking news consumers to pay for what they read on their screens was seen as a risky gambit.
‘Virtuous circle’
“We’ve proven that it’s possible to create a virtuous circle,” Mr Thompson said in a statement, “in which wholehearted investment in high-quality journalism drives deep audience engagement, which in turn drives revenue growth and further investment capacity.”
Adjusted operating profit for the second quarter was $52.1 million, a 6.2 per cent decline from $55.6 million in the same time last year. The pandemic posed challenges to the news industry in April, May and June as businesses across many industries cut back on marketing, leading to sharp declines in advertising spending and tens of thousands of furloughs, pay cuts and layoffs at media organizations.
Ad revenue fell 32 per cent in the digital part of the business and 55 per cent in print compared with the equivalent period last year. Total ad revenue fell to $67.8 million, from $120.8 million, a 44 per cent drop. That figure fell short of the 50 per cent to 55 per cent decline forecast by Times executives in May.
Layoffs
The Times laid off 68 employees in June, most of them in advertising, including all those who worked at its experimental marketing agency Fake Love, which was closed. The newsroom and opinion departments were not affected by the cuts. The company’s headquarters in Midtown Manhattan were all but shut down in March because of the pandemic, and Times employees have been advised that they will not be required to return to the office before January.
The quarter’s surge in digital subscriptions was probably related to strong interest in news of the pandemic, the widespread protests against racism and police violence that started in May and the 2020 presidential campaign. The company signed up 493,000 net new subscriptions to what it calls its “core news product” during the three-month period. The cooking and crossword apps, along with other digital offerings, brought in an additional 176,000 subscriptions. Citing the pandemic, the company offered a bleak outlook for advertising revenue in the third quarter, projecting an overall decline of 35 per cent to 40 per cent. For digital ad revenue, the Times said it expected a 20 per cent decline over last year’s third quarter. That would be an improvement over the second quarter’s slide.
Newsstand sales
Digital circulation revenue rose 29.6 per cent during the quarter, to $146 million, compared with the equivalent period last year. At the same time, print circulation revenue fell 6.7 per cent, to $147.2 million. The company attributed that drop to a falloff in newsstand sales; home-delivery print circulation revenue remained flat.
Total circulation revenue rose 8.4 per cent. The company said it expected total subscription revenue to rise 10 per cent and digital-only circulation revenue to have a 30 per cent increase in the next quarter. Total adjusted operating costs fell nearly 8 per cent during the second quarter, to $351.6 million, with sales and marketing costs declining 36 per cent.
A category the company calls “media expenses” – indicating how much it spent to promote subscriptions – was more than halved during the quarter, falling to $16.5 million from $33.9 million. – New York Times Service
