New York Times reports gain of 180,000 digital subscribers

The New York Times Company added about 180,000 net digital subscribers in the second quarter of the year, but generated less digital ad revenue, it said Wednesday.

The Times now has 9.17 million paying subscribers. It has a target of 15 million by the end of 2027.

The company reported adjusted operating profit of $76 million, down 18 percent from the year-ago quarter. It generated total revenue of $555.7 million, up 11.5 percent from a year earlier. Digital subscriptions accounted for $238.7 million of that revenue, up 25.5 percent.

The blow to corporate profits was largely due to losses at The Athletic, the sports news website that The Times bought in February for $550 million. Adjusted operating losses at The Athletic were $12.6 million for the quarter, April to June, compared to approximately $19.4 million in the first quarter.

The Times reported 9,107 million subscribers at the end of the first quarter of 2022. That number was revised to 9.01 million in the quarterly results.

An important part of The Times’ strategy is to distinguish between subscribers and subscriptions. One subscriber can subscribe to more than one of the company’s products, including The Athletic, Cooking, and Wirecutter. The Times is committed to bundling digital offerings with its news story to reach new audiences with diverse interests.

“News remains at the heart of our value proposition, but the bundle ensures that The Times is indispensable to an ever-growing group of people, even as news engagement ebbs and flows,” Meredith Kopit Levien, the Times Company president and chief executive, said during a conversation with analysts.

In the second quarter, the company had its all-time high-new subscriber base on the All Digital Access tier, which includes The Times, Games, Cooking, Wirecutter and The Athletic news release, Ms. Levien said.

Net profit from 180,000 digital-only subscribers was 70 percent more than net profit in the second quarter of 2021. The company added much more in the first quarter of the year, 418,000. The Athletic added a net increase of 50,000 standalone subscribers in the most recent quarter.

The vast majority of The Times subscribers only pay for digital access. Print subscribers continued to shrink in the second quarter, down nearly 7 percent from a year earlier, to approximately 761,000.

Digital advertising revenue for the Times Company fell 2.4 percent in the quarter from a year earlier, to $69.3 million, as marketers cut spending in the face of economic uncertainty. Print ads recovered 15.1 percent to $48.1 million, compared to the same quarter last year, as the entertainment and luxury categories began to recover from the pandemic.

Total operating expenses increased 19.6 percent to $504 million. The company also posted a $34.2 million profit from the sale of land at The Times’ printing facility in College Point, Queens.

The company expects digital subscription revenue to grow 21 to 25 percent in the third quarter from a year ago. It said it expects a flat or small decline in total ad revenue and a 9 to 13 percent increase in adjusted operating costs over the period.

Shares of the company fell about 1 percent in early trading on Wednesday.

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