NY Times' Efforts To Counter Soft Ad Revenues Gain Traction

The New York Times Company (NYSE:NYT) has been contemplating new avenues of revenue generation in a bid to counter the dwindling advertising revenues. Analysts pointed out that increasing online readership has made the print-advertising model increasingly redundant. We noted that print advertising revenue fell 8.4% in the final quarter of 2017.

Nevertheless, the company is fast acclimatizing to the changing face of the multiplatform media universe, and has already included mobile and reader application products in portfolio. Other publishing companies such as New Media Investment Group Inc. (NYSE:NEWM) , Gannett Co., Inc. (NYSE:GCI) and The McClatchy Company (NYSE:MNI) are also trying to adapt to different revenue generating ways.

The New York Times Company has been realigning cost structure and streamlining operations to increase efficiencies. The company is concentrating on online activities, as evident from its pay-and-read model. The company notified that the number of paid digital subscribers reached 2,644,000 at the end of the fourth quarter of 2017 — rising 157,000 sequentially and 41.8% year over year.

Subscription revenue grew 19.2%, primarily due to increase in the number of subscriptions to the digital-only products. Management now projects total subscription revenue in the first quarter of 2018 to increase in the mid to high-single digits.

Digital advertising revenue increased 8.5%, after witnessing an increase of 11% in the preceding quarter. Higher digital advertising revenue can be attributed to rise in revenues from mobile platform, programmatic buying channels and branded content, partly offset by a fall in traditional website display advertising.

The company is not only gearing up to become an optimum destination for news and information but is also now focusing on service journalism, with verticals like Cooking, Watching and Well. In this regard, it acquired The Wirecutter and its sister site, The Sweethome that recommends people about technology gear, home products and other consumer services. The company also acquired a digital marketing agency and portfolio company, HelloSociety, from Science Inc., which complements its T Brand Studio that helps in creating digital ad innovation and branded content. Further, it has launched digital subscriptions for NYT Cooking, its popular recipe site and app.

Bottom Line

The New York Times Company is diversifying business, adding new revenue streams, strengthening balance sheet and restructuring portfolio. It had offloaded assets in order to re-focus on its core newspapers and pay more attention to online activities. These helped the company to post sixth straight quarter of positive earnings surprise, when it reported fourth-quarter results.

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New York Times Company (The) (NYT): Free Stock Analysis Report

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