New York: Readers continue to shower The New York Times with money. Advertisers, not so much.
The publisher added 273,000 new online subscribers in the third quarter, for a total of 4 million digital readers, the company reported Wednesday. The number of total subscribers, including print and digital, hit 4.9 million, a high. Advertising was the weak spot, falling 6.7 per cent overall, with digital ad revenue dropping 5.4 per cent.
The decline in print advertising was not unusual, as readers continue to prefer getting their news on screens. The drop in digital ads, however, was more surprising for The Times, an established publisher with a growing base of online readers.
In the earnings statement, Mark Thompson, the chief executive, chalked up the decline to the “continued turbulence in the digital advertising space.” Last year, the company benefited from a more robust ad business when it drew marketers like Google, which spent heavily to promote its cloud service. The company said it expected a “challenging” fourth quarter for digital advertising as well.
For the third quarter, the company earned $44 million in adjusted profit, or 12 cents a share, on $428.5 million in revenue, beating expectations. Wall Street had expected a profit of about $40 million, or 10 cents a share, on $428.6 million in sales. Costs rose 5.4 per cent, to $401 million, largely from higher newsroom expenses, which included new hires.
The New York Times Co. kept the focus on its digital subscriber gains in its report, and Thompson called the period from July to September “our best-ever third quarter for new digital news subscriptions.” The majority of the new additions, about 209,000, paid for the main news product. The rest came from subscriptions to the Crossword and Cooking products.
Despite the steady rise in online readership, each subscriber brings in less revenue on average as the company continues to offer promotions.
The company also revealed for the first time the size of its international readership: 500,000 digital subscribers, mostly from Britain, Canada and Australia. The company said it was still on a pace to reach its previously stated goal of having 10 million total paying readers by 2025, with “at least 2 million” coming from outside the United States.
The company’s new television effort, “The Weekly,” available on the cable network FX and the streaming service Hulu, helped bump up revenue in the period. The company does not report sales figures for the show, but the unit under which it operates posted a $9.8 million jump in revenue, mostly from “The Weekly.” Deals for documentary-style TV programs typically bring in $500,000 to under $1 million per episode for publishers.
The show, which began in June, averaged about 382,000 total viewers who watched it within the first week of each episode’s air date, according to Nielsen data. That figure does not include those who watched on Hulu.
In December, the company expects to buy back its headquarters building, at 620 Eighth Ave. in Manhattan, for $245 million. That will eat into the company’s cash holdings of about $877 million.
The Times spent $619 million on the 52-story building, designed by architect Renzo Piano, and entered the space in 2007. Two years later, the company entered into a sale-leaseback agreement and raised $225 million to help pay down its debts. The deal came with an option to buy the building back in 2019. The effective interest rate on the loan was approximately 13 per cent.