The New York Times hit a milestone last month – 1 million digital-only subscribers – including 33,000 digital subscribers added during the second quarter of 2015. In addition to digital-only subscribers, The Times has 1.1 million print-and-digital subscribers.In a press release about the achievement, president and CEO Mark Thompson commented:
“This is a major milestone for our digital consumer business, which we launched in 2011 and has continued a strong and steady growth trajectory. It puts us in a unique position among global news providers. We believe that no other news organization has achieved digital subscriber numbers like ours or comparable digital subscription revenue. It’s a tribute to the hard work and innovation of our marketing, product and technology teams, and the continued excellence of our journalism.”In its second quarter 2015 earnings report, The Times reported a $38.1 million operating profit, compared to a $16.5 million profit this time last year. Circulation revenue was up 0.9%, while advertising revenue overall was down 5.5%. Print advertising was down 12.8%, while digital advertising revenue grew by 14.2%. Digital advertising revenue for the second quarter was $48.3 million, nearly a third of total company ad revenue.”Digital advertising also saw another strong quarter – finishing up 14% and rounding out a full year of double-digit revenue growth that started in the second half of 2014. Q2’s digital strength was again driven by growth in mobile, paid posts and video,” said Thompson.”Cost declines outpaced the decrease in overall revenues, which was primarily driven by continued pressure on print advertising, and led to strong adjusted operating profit growth in the quarter. Expense management will remain a top priority as we head into the second half of 2015, although our emphasis on digital investment and execution is also more intense than ever,” he added.To keep the momentum going, The Times has formed three significant partnerships to help it reach new audiences and to provide additional revenue.Facebook: The Times is testing Instant Articles on Facebook, where the news outlet will post stories directly to Facebook. The Times can either sell or embed ads within the articles, keeping 100% of the revenue, or it can allow Facebook to sell ads and share the revenue.Apple: The New York Times has partnered with Apple to share some of its content to readers for free via the new iOS “News” app, reported GeekWire.Starbucks: Starting next year, Starbucks loyalty members can read daily and weekend briefings from The Times via the Starbucks mobile app. Loyalty members will also be able to earn reward points by purchasing digital or print subscriptions to The Times.Insider Take:Can The New York Times sustain its digital growth? Will its new partnerships help or hurt digital subscriptions? It depends on whom you ask.In a June editorial in The New York Times, Margaret Sullivan says the new partnerships take The Times into “some risky territory.” Her concern is that The Times’ quality journalism is costly, and offering it for free. Sullivan fears that The Times will “cannibalize itself” by giving away content, making subscriptions unnecessary.Kinsey Wilson, executive vice president of product and technology for The Times, countered Sullivan’s assertions, saying the hope is to move millions of new readers “from free and casual use of The New York Times to becoming more engaged users, many of whom will subscribe. They have to love and value what we do.”It looks like The New York Times is trying to find the delicate balance between reaching out to new audiences while maintaining its strong, editorial focus without breaking the bank. They are testing new partnerships and new products to see what works and adapting their strategy based on their findings.The NYT Now iPhone app is a good example of the company’s willingness to experiment. The app was originally created as a paid app, to appeal to a wider, younger audience, but readers weren’t interested in paying $7.99 a month for it, or they were already subscribers. Instead of getting rid of the app, The Times made it into a free product, calling the new version NYT Now 2.0.If The New York Times follows this example for its new partnerships, the company has a good chance of continuing the upward trajectory of its digital subscriptions and digital advertising revenue. Create, test, tweak, repeat.
Finding and Fixing Leaks in Your Revenue Bucket