Just days after announcing their acquisition of Wordle, The New York Times Company raises their subscriber goal to 15 milion by the end of 2027. The new subscriber goal comes on the heels of double-digital increases in their fourth quarter and full year 2021 financials. The company reported total revenue of $594.2 million, compared to $509.4 million for the fourth quarter of 2020, a 16.7% increase year-over-year. Of that total, $351.2 million came from subscription revenue, an 11.2% increase year-over-year, $176.8 million from advertising revenue, a 26.9% increase year-over-year, and $66.3 million in other revenue, a 22.1% increase year-over-year.
“Our performance in 2021 demonstrated the power of our digital-first, subscription-first approach as we posted our second-best year ever for net subscription additions and strongest operating profit and adjusted operating profit in many years, which was a result of our consistent strategy and focus,” said Meredith Kopit Levien, president and CEO of The New York Times Company, in a February 2, 2022 news release.
“Since we launched our current strategy in 2015, we’ve been investing steadily into a once-in-a-generation opportunity to pioneer the development of a large and growing news and information market at a time when habits are up for grabs,” Levien added. “Our priority from here is to continue this momentum by further penetrating our growing total of addressable market and leveraging both our unique platform and the deliberate investments we’ve made in our journalism, technology and adjacent products to build a larger and more profitable New York Times Company. For the third time in six years, we are setting a new, more ambitious target as we pursue the next phase of our growth journey.”
The next major milestone
The Times’s subscriber goal of 15 million subscribers by the end of 2027 is a stretch, but the company has proven itself worthy of a challenge. Previously, The Times set their subscriber goal of hitting 10 million subscribers by 2025. With the recent acquisition of The Athletic, a popular digital sports news site that covers over 200 sports clubs and teams globally, The Times has already surpassed that goal. In their news release, the company said it believes it can achieve their subscriber goal by providing bundled digital subscriptions which would likely include an attractive mix of The Times’s most popular products.
Additional highlights for Q4 and FY 2021
The Times reported additional highlights for the quarter and full year 2021:
- The Times closed the fourth quarter with about 7.6 million paid subscribers with approximately 8.8 million paid subscriptions across print and digital products.
- The Athletic added at least 1.2 million subscribers. The deal closed on February 1, 2022, earlier than originally expected. The Times purchased The Athletic for $550 million with cash on hand.
- Subscription revenue increases were driven primarily by The Times’s digital-only products include News, Games, Cooking, Audm and Wirecutter and by a graduation from promotional subscription pricing to standard pricing.
- Subscription revenue from digital-only products grew 23.1% to $205.5 million.
- Print subscription revenue dropped 2.1% to $145.7 million, primarily due to lower single-copy sales and lower revenue from domestic home delivery sales which dropped 1%.
- Fourth quarter digital advertising revenue increased 23.3% to $111.1 million and print ad revenue grew 33.6%, primarily in the luxury and entertainment categories which have been down because of the pandemic.
- Total operating costs were $500.1 million, a 16.6% increase year-over-year. Cost increases due to more newsroom employees, higher advertising servicing costs, sales and marketing costs, product development costs and general and administrative costs.
- The company had capital expenditures of about $9 million, compared to $5 million for the prior year quarter.
- The Times reported net income of $69.9 million, compared to $10.7 million for the same period last year.
- Diluted earnings per share were $0.41, compared to $0.06 for the fourth quarter of 20210.
First quarter 2022 outlook
The Times provided the following guidance for the first quarter of 2022.
- Digital-only subscription revenues, including The Athletic, are estimated to increased 23% to 28%.
- Total subscription revenues, including The Athletic, are estimated to increase 11% to 15%.
- Total advertising revenues, including The Athletic, are expected to increase 17% to 21%.
- Other revenue is expected to increase 15% to 20% with no impact from the acquisition of The Athletic.
- Operating costs, including The Athletic, will increase 18% to 22%.
As we said just last week, The New York Times remains the media organization to watch. They set the bar high for themselves with stretch goals, and they aggressively pursue opportunities to meet them. They are constantly innovating, improving the customer experience, and discovering new ways to attract, delight and retain subscribers. Their most recent acquisitions are a testament to their willingness to think outside the box and to use acquisitions as a way to further their strategic goals.