The newspaper counted net income for the second quarter of $23.6 million, a 51 percent increase from $15.6 million during the same period last year, on total revenue of $414.6 million, a slight bump of 1.8 percent from $407.1 million. Earnings per diluted share also rose to 14 cents during the quarter from 10 cents.
Mark Thompson, the Times’ chief executive officer, noted 109,000 new digital-only subscribers joined during the quarter, bringing subscriptions up to 3.8 million, 2.9 million of which are digital-only.
“Subscription revenues accounted for nearly two-thirds of the company’s revenues, a trend we expect to continue,” Thompson said. “We continue to believe that there is significant runway to expand that base substantially.”
Discussing in May first-quarter results, Thompson set a long-term goal of 10 million subscribers. During the second quarter, revenue from subscriptions grew 4.2 percent to $260.6 million.
A focus on subscriptions makes sense, considering continued weakness in advertising at the Times. During the second quarter, total advertising revenue fell 10 percent to $119.2 million, while digital ad revenue fell 7.5 percent to $51 million.
This may have been cause for concern on Wall Street, as shares of the Times fell 5.7 percent to $22.90, a low for the week, but generally in line with prices over the last six months.
Thompson said this dip was expected, adding: “We remain confident that we will return to strong year-over-year growth in the third quarter.”
Meanwhile, interest in print subscriptions is waning, compared to last year, when there was a new peak in news readership with the dramatic election and early presidency of Trump, marked by more subscriptions and single-copy purchases. Total daily circulation fell 10.5 percent during the second quarter and Sunday circulation fell 7.5 percent.
But the Times is also growing its “other” revenue stream, mainly made up of syndication deals, expanded commercial printing, archive licensing, affiliate referrals, live events and retail and rental income. Revenue from these areas increased 40 percent during the second quarter to $34.7 million.
As for marketing, there’s been an increased focus on international, like expansion into Australia and the U.K., which is key to the newspaper’s hope for exponential digital subscription growth in the coming years. Thompson said during a call with analysts that these markets are the target of “coordinated efforts” that include more journalism and opinion, along with marketing.
“We remain confident that we can scale our digital subscription business much further,” Thompson said. “We’ll do that by deepening engagements to an improved product experience and personalization, incentivizing registered and logged-on use, developing a more compelling customer journey and optimizing both our pay model architecture and pricing and bundling strategy.”
Thompson also mentioned a slight pullback from marketing on Facebook over concerns that ads for the Times would be considered political and grouped improperly, but noted there’s “been some progress” in talks with the social media platform that have him thinking use of Facebook for marketing will increase again next quarter.
Looking ahead to the third quarter, total subscription revenue is expected to increase again by the low single digits, led by a double-digit increase in digital subscriptions. Other revenues are expected to grow by about 50 percent, while increased marketing costs are poised to continue.
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