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| New York Times Co. Advertising Drops as ‘Turbulence’ Hits Digital Market | New York Times Co. Advertising Drops as ‘Turbulence’ Hits Digital Market |
| (about 3 hours later) | |
| Readers continue to shower The New York Times with money. Advertisers, not so much. | 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 four 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 percent over all, with digital ad revenue dropping 5.4 percent. | The publisher added 273,000 new online subscribers in the third quarter, for a total of four 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 percent over all, with digital ad revenue dropping 5.4 percent. |
| 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. | 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. |
| The stock, which fell as much as 9 percent in early trading on Wednesday, was down 3.7 percent at the close. | |
| 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 as well, with digital advertising expected to fall somewhere around 15 percent. | 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 as well, with digital advertising expected to fall somewhere around 15 percent. |
| 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 on income. 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 percent, to $401 million, largely from higher newsroom expenses, which included new hires. The company, which is nearing 1,700 newsroom staffers, expects operating costs to increase “to higher levels” starting next year. | 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 on income. 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 percent, to $401 million, largely from higher newsroom expenses, which included new hires. The company, which is nearing 1,700 newsroom staffers, expects operating costs to increase “to higher levels” starting next year. |
| The New York Times Company kept the focus on its digital subscriber gains in its report, and Mr. 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. | The New York Times Company kept the focus on its digital subscriber gains in its report, and Mr. 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 Times sold subscriptions for $1 a week starting in August 2018, and those customers are now seeing their rates rise after the one-year offer expires. Renewals for those readers have been fairly positive, Mr. Thompson said. | Despite the steady rise in online readership, each subscriber brings in less revenue on average as the company continues to offer promotions. The Times sold subscriptions for $1 a week starting in August 2018, and those customers are now seeing their rates rise after the one-year offer expires. Renewals for those readers have been fairly positive, Mr. Thompson said. |
| The Times also hailed a major change to the company’s pay model, an initiative known internally as Project Redbird. Starting in the third quarter, the publisher limited the amount of free content available to anonymous users to just one article. Readers were then prompted to register to get to more free content, anywhere from five to 10 stories. | The Times also hailed a major change to the company’s pay model, an initiative known internally as Project Redbird. Starting in the third quarter, the publisher limited the amount of free content available to anonymous users to just one article. Readers were then prompted to register to get to more free content, anywhere from five to 10 stories. |
| That was a key factor in the uptake of new subscribers in the quarter, executives said on an earnings call after the report. Meredith Kopit Levien, the chief operating officer, added that the project was part of long-term planning for a more efficient marketing strategy. The company expects digital subscription revenue to increase by around 15 percent for the fourth quarter. | That was a key factor in the uptake of new subscribers in the quarter, executives said on an earnings call after the report. Meredith Kopit Levien, the chief operating officer, added that the project was part of long-term planning for a more efficient marketing strategy. The company expects digital subscription revenue to increase by around 15 percent for the fourth quarter. |
| 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 10 million paying readers by 2025, with “at least two million” coming from outside the United States. | 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 10 million paying readers by 2025, with “at least two 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 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. | 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. |
| The publisher cut a multimillion-dollar, multiyear licensing agreement with Facebook last month that should also add to the company’s fourth-quarter revenue. As part of its latest foray into publishing, Facebook will feature articles from The Times along with other publishers like The Wall Street Journal and The Washington Post for a new section of its mobile app dedicated to news. | The publisher cut a multimillion-dollar, multiyear licensing agreement with Facebook last month that should also add to the company’s fourth-quarter revenue. As part of its latest foray into publishing, Facebook will feature articles from The Times along with other publishers like The Wall Street Journal and The Washington Post for a new section of its mobile app dedicated to news. |
| Mr. Thompson called it a strategically significant deal. “This is the first time that a Silicon Valley major has recognized the value of Times journalism to its platform with a substantial multiyear fee,” he said. | Mr. Thompson called it a strategically significant deal. “This is the first time that a Silicon Valley major has recognized the value of Times journalism to its platform with a substantial multiyear fee,” he said. |
| The Facebook agreement differs markedly from one offered by Apple this year for its Apple News Plus product. The Times declined to join that effort, a deal that would have split subscription revenues with the hardware giant. Apple News Plus, a $10-a-month subscription app installed on all iPhones, hosts entire articles on its service. Facebook’s news tab, by contrast, shows only headlines and summaries and directs users to the publishers’ sites. | The Facebook agreement differs markedly from one offered by Apple this year for its Apple News Plus product. The Times declined to join that effort, a deal that would have split subscription revenues with the hardware giant. Apple News Plus, a $10-a-month subscription app installed on all iPhones, hosts entire articles on its service. Facebook’s news tab, by contrast, shows only headlines and summaries and directs users to the publishers’ sites. |
| In December, the company expects to buy back its headquarters building, at 620 Eighth Avenue in Manhattan, for $245 million. That will eat into the company’s cash holdings of about $877 million. | In December, the company expects to buy back its headquarters building, at 620 Eighth Avenue 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 the architect Renzo Piano, and moved into 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 about 13 percent. | The Times spent $619 million on the 52-story building, designed by the architect Renzo Piano, and moved into 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 about 13 percent. |