New York Times Has Higher Revenue, Faces Ad Challenges

From a Wall Street Journal story by Alexandra Bruell headlined “New York Times Posts Higher Revenue, Faces Advertising Challenges”:

New York Times Co. gained 190,000 digital subscribers in the first quarter but said its advertising business continued to face challenges in an uncertain economy.

The news organization said it now has more than 9 million digital-only subscribers—which it defines as people who subscribe to at least one Times digital product—and generated more revenue from each of them than it did in recent quarters, though still less than in the year-earlier period. Taking into account its print operations, the company had a total subscriber base of 9.7 million.

The Times continued to offer heavily discounted access to its bundle of products—which includes its core news, games and cooking offerings as well as the sports publication the Athletic and Wirecutter, a product-recommendation website—and said the number of bundle and multiproduct subscribers crossed the 3 million mark during the quarter.

“While advertising continues to experience near-term, cyclical challenges, our bundle strategy is gaining momentum,” Chief Executive Meredith Kopit Levien said.

Overall, first-quarter revenue grew by 4.3% from a year earlier to $560.7 million, while net profit soared to $22.3 million from $4.7 million, partly due to acquisition-related charges in the year-earlier period.

Digital-advertising and total advertising revenue decreased 8.6% as the economic environment continued to affect the company’s ad business, the company said.

The Times said it expects digital-advertising revenue to fall again in the second quarter by low-to-mid single digits in percentage terms.

Advertising revenue was down more than the company expected in the quarter, Ms. Kopit Levien said, as marketers pulled back on spending in some of the company’s largest categories, such as technology, finance and media.

The company said it generated $9.04 in revenue per digital-only subscriber, less than it did in the year-earlier period but more than it did in each of the previous three quarters. Its revenue-per-user metrics have been pressured by discounting efforts as the Times looks to increase bundle subscribers. New digital bundle subscribers are currently charged $4 every four weeks for the first year instead of $25, a further discount from the company’s $6 offer last quarter.

The company has no real indication of how quickly subscribers will renew when the one-year discount ends, since the offering is new, Chief Financial Officer Roland Caputo said.

The Times said it is raising prices for news subscribers to $20 every four weeks from $17. Games and cooking are both increasing from $5 to $6, it said.

The company appointed Times veteran William Bardeen as executive vice president and chief financial officer. Mr. Bardeen, who is currently chief strategy officer, succeeds Mr. Caputo, who said last year he would retire from the role.

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