NYT reports a $14M Q1 loss, ad revenue falls nearly 7%, but digital-only subs grow 13%
The Gray Lady still fails to find enough digital reader revenue to overcome ad losses, while promising to continue international expansion and cost controls at the same time
The New York Times Co. today reported its first quarter earnings, saying that the company had lost $13.6 million in the quarter due to continuing falling advertising revenue.
Ad revenue fell 6.8 percent in Q1, with both display and classified advertising falling substantially. Circulation revenue grew 2.4 percent, thanks to a strong quarter for digital-only news subscriber growth. Advertising now accounts for less than 37 percent of total revenue for the company – good news for the paid content crowd who have been promoting paid content – bad news, though for the bottom line as no substitute for paid advertising has yet been found to reverse the company’s losses.
“We had a more challenging quarter in both print and digital advertising in large part due to conditions impacting the entire advertising marketplace,” said Mark Thompson, president and CEO of The New York Times Company. “We remain confident in our ability to grow our digital advertising revenue in the long term and we are continuing to invest in ad product innovation. Looking ahead into 2016 and as we have previously stated, we will be investing in several areas that we believe will increase revenue and contribute to our successful business transformation, including the investment in international expansion that we announced last month. And, as always, we intend to keep a sharp focus on our cost base.”
For the NYT going forward, it will be more of the same: a reliance on digital subscription growth, and a deemphasis on paid advertising. Meanwhile, the company will also have to grapple with the impression that it is creating a workplace riff with discriminatory staffing policies. This last week the company was hit with its third age discrimination lawsuit.
The lawsuit, filed on behalf of Ernestine Grant and Marjorie Walke, two employees in their sixties, claims that under Times leadership the company is looking to have a staff that matches its desired readership profile – young, white, single.
“Unbeknownst to the world at large, not only does the Times have an ideal customer (young, white, wealthy), but also an ideal staffer (young, white, unencumbered with a family) to draw that purported ideal customer,” the lawsuit states. “In furtherance of these discriminatory goals, the Times has created a workplace rife with disparities. Unfortunately, the Times’s Advertising staff on the business side is systematically becoming increasingly younger and whiter.”
Of course, as that readership profile moves to digital, the company is looking to move along with it. In this regard, the company made progress, Thompson said today.
“The rate at which we are adding digital subscriptions continues to accelerate. This quarter, we added 67,000 net digital-only subscriptions to our news products, more quarterly additions than we have had in over three years, a 21 percent increase year-over-year and a real achievement as our pay model reaches its fifth anniversary. We have continued to prioritize deepening the level of engagement of our readers with Times content and this effort, along with the application of new consumer marketing tactics, has led to an increase in new subscribers and improved retention of existing ones,” said Thompson.
The company recently announced that it would close its Paris editing and prepress print production operations, with the loss of about 70 positions. It also recording a $41 million loss related to the closing of a paper mill in Maine.