New York Times revenue dips on advertising decline
Advertising revenue - both print and digital - falls 6% from a year earlier
The New York Times said its second-quarter revenue fell almost 1 per cent as gains in subscriptions to its flagship and other newspapers could not offset declines in advertising.
But the company, which publishes its namesake newspaper, the Boston Globe and the Worcester Telegram & Gazette, also posted a better-than-expected profit, and its shares rose 2 per cent in morning trading.
Advertising revenue - both print and digital - fell 6 percent from a year earlier to $207.4 million. The company, as well as the entire newspaper industry, is battling against a relentless decline in advertising - once a primary source of revenue for most newspapers.
To combat the decline, New York Times has rolled out a subscription model for its digital products to tap a new revenue stream. Circulation revenue rose 5 per cent to $245.1 million in the second quarter, including paid digital subscriptions at its flagship and Boston Globe properties.
Circulation revenue now accounts for half of New York Times’s total revenue. Total revenue for the second quarter was $485.4 million, below analysts’ average estimate of $487.43 million.
At the New York Times newspaper and its international edition, once known as the International Herald Tribune, digital-only subscriptions increased 35 per cent from a year earlier to 699,000. The drop in advertising revenue in the second quarter was less than first quarter’s 11.2 per cent.
But it is unclear if the decline will continue to moderate. The company forecast that third-quarter advertising trends will be volatile. “The increase in operating profit reflects the ongoing evolution of our digital subscription initiatives on the circulation side, the moderation of revenue declines on the advertising side, and the continued focus on managing costs,” New York Times chief executive Mark Thompson said in a statement.
Operating profit rose 21 per cent to $53.4 million. Excluding one-time items, it earned 14 cents a share, beating analysts’ average estimate by 2 cents. The company is currently shopping the Boston Globe and its sister Worcester Telegram & Gazette.
In its heyday, New York Times had TV, radio, magazines, dozens of newspapers and stakes in sports ventures.