Q1 Financials: How Did Subscription Companies Fare?

With the first quarter of 2015 behind us, let’s take a look at how some subscription companies fared.tfl McClatchy takes $11 million hit due

With the first quarter of 2015 behind us, let’s take a look at how some subscription companies fared.tflMcClatchy takes $11 million hit due to decreased ad revenueLast week McClatchy Co. reported that it lost $11 million in the first quarter of the year. Though that’s a big hit, it is an improvement over the $16 million hit the publishing giant took following the first quarter of 2014. The biggest culprits in the loss were declining ad revenues. National advertising was down by 26%, and retail advertising was down by 13%. To stem the bleeding, McClatchy will cut costs including reducing staff in some of its key markets – Charlotte, Raleigh, Miami and Kansas City. The news isn’t all gloomy though. McClatchy reports that subscription revenue grew to $93 million, a 5% increase over the same period last year. Also, mobile readership is growing and digital advertising rose 4%.An Iffy Future for PandoraAfter Pandora released its first quarter financials, Pandora Media took a 5% hit on the stock market, in spite of improvements. Its revenue grew 19% to $230.8 million over the first quarter of 2014. The Internet radio provider reported a net loss of $48.3 million, or $0.23/share. Though significant, losses of $0.27/share were predicted. Financial experts are concerned about larger losses – 67% year over year -a pending rise in royalty rates, and increased marketing expenses (31.8% after Q1 2015 versus 36.5% after Q1 2014). Under the existing business model, experts are concerned Pandora won’t be able to stay afloat, thus the drop in stock price. On the plus side, total listener hours increased 11% to 5.3 billion and active listener count grew 5% to 79.2 million. Changes in strategy and shifts in its business model are likely needed for Pandora to see a solid financial future.Netflix Grows to 60 Million MembersIn a letter to its shareholders on April 15, Netflix noted that it passed some big milestones during the first quarter of 2015, most notably, reaching 60 million members (40 million in the U.S. and 20 million globally). Of those members, 4.9 million were brand new members (2.3 million U.S. and 2.6 million abroad) in Q1. During the first three months of the year, members streamed more than 10 billion hours of content, including Netflix original series, documentaries, comedy specials and other programs. Revenue from its streaming operations increased in all categories (total, U.S. streaming and international streaming) to $1.4 billion. Overall, Netflix reports that its content strategy and subscription base are strong, as is its position on net neutrality. In 2015, it will focus on technology improvements and shifting marketing dollars to promote Netflix internationally. 

Up Next

Register Now For Email Subscription News Updates!​

Search this site

You May Be Interested in:

Join us to master the latest subscription business strategies, from emerging payment trends