New York Times Posts Soaring Profits On Digital Subscription Growth
It is no big secret that print media companies are struggling right now. Printing and distribution costs remain tough to cover, but users are flocking to digital sources more and more consistently these days. And that means publishers are wasting more and more money on physical publications.
Even companies like the New York Times face inevitable extinction if they cannot find a way to bridge this digital gap. Fortunately, the New York Times Company has been able to corner digital advertising markets to achieve remarkable growth last year.
Indeed, the NYT has seen revenues form digital advertising increase nearly 23 percent since the last year—to $55 million—with this growth accounting for 42 percent of total ad revenues. Perhaps more importantly, this growth helped to offset a 10.5 percent loss in print advertising revenue.
New York Times Company president and chief executive Mark Thompson comments, “We had another strong quarter in which we grew revenue and profitability and made significant changes within the organization to ensure that the acceleration of our digital business continues in the long term.”
He goes on to say, “We believe that more and more people are prepared to pay for high quality in-depth journalism that helps them make sense of the world.”
All that said, then, it is quite remarkable to see that shares for the New York Times are up roughly four percent in Thursday trading; prices are at their highest levels since April of 2008. Following the digital trend, also, the company reported 93,000 net digital-only subscribers in the second quarter.
That is a 46 percent increase over the same period last year.
On the other hand, digital advertising revenue increased by 23 percent to reach $55 million, compared to print advertising falling 11 percent to $77 million. At the end of the day, though, the value of the New York Times has increased more than 43 percent this year; the S&P 500 has only increased nearly 11 percent on the year, so far.
As such, the New York Times reported a profit of $15.6 million in the second quarter, significantly higher than the loss of $211,000 from the same period last year. Per share, the New York Times has posted an earnings of about 9 cents.