DIGITAL AD GAINS BOOST NYT’S Q4: Costs related to workforce reductions and investment in digital pressured The New York Times’ fourth quarter, but results were still better than Wall Street had expected.
For the three months ended Dec. 28, net income dropped 46.9 percent to $34.9 million, or 22 cents a diluted share, from $65.6 million, or 41 cents a year ago. Total revenues inched up 0.2 percent to $444.7 million from $443.9 million. On an adjusted basis, diluted EPS was 26 cents, beating Wall Street analysts’ consensus expectations by 2 cents.
Digital advertising revenue for the quarter rose 19.3 percent, while print advertising revenue fell 9.2 percent in the period. At $63.2 million, digital advertising revenue represented 30.5 percent of the company’s total advertising revenues. Circulation revenues rose 1.4 percent to $210.6 million from $207.7 million.
Mark Thompson, president and chief executive officer, told Wall Street analysts during a conference call, “We made enough progess with out digital revenues to more than offset the secular pressures on the print side of our business and to deliver modest overall revenue growth, especially the progress on digital advertising.”
He added that digital growth came from Paid Posts, its native advertising program, plus growth in ad sales connected with video and mobile.
The Times finished the year with 910,000 paid digital subscribers, an increase of 150,000 from 2013, and the company is “on track to exceed the one million digital subscriber milestone in 2015,” according to Thompson. The company added 35,000 net new digital subscribers in the quarter, representing a 20 percent increase from the same quarter in 2013.
However, even Thompson noted that the company still has much to do, stating that “we don’t believe we’ve yet fully exploited the full potential of our digital subscription business.”
He added that that the “digital advertising market continues to evolve rapidaly with great new opportunities alongside pressure on some existing costs of the business. That means we don’t currently expect 2015 to deliver quarterly year-on-year gains as high as some of those we enjoyed in 2014.”
And while the Times has been engaging a younger audience, new to its readership base, “we’ve also learned some lessons about the need to spend sufficient time building the audience for new product before full monetization,” he said. New products last year include its NYT Now app.
Thompson also said there is a “real opportunity to scale the [digital advertising] business more quickly than we are at the moment,” and noted that targeted investments in print will also be part of the story in 2015, such as the relaunch of The New York Times Magazine later this month and the new Men’s Fashion lifestyle section in April. The latter represents the Times’s first new print section in 10 years, and “when we do [launch], we’ll be well positioned to thrive given our success today within the luxury advertising category.”
He added that the company is rolling out its ability to allow for international subscriptions in local currency to boost growth overseas.