Last year was a very good year for The New York Times Co. who set a company record for digital subscription growth. The company added more than 1 million net new digital-only subscribers last year. It now has more than 5.2 million total subscribers, including print and digital, making it one of the few U.S. newspapers that has developed a winning formula in the digital age. Mark Thompson, president and CEO of The New York Times Co., commented on the company’s 2019 results.
“2019 was a record setting year for The New York Times’s digital subscription business, the best since the Company launched digital subscriptions almost nine years ago. That success is a testament to the extraordinary work of Times journalists around the world and also to the radically different way that we’re running digital operations at the company, with cross-disciplinary teams who enjoy significant autonomy and access to the machine learning, engineering and testing capabilities they need to move our business forward,” Thompson said.
Here are the highlights Thompson shared in a February 6 news release:
- 5,251,000 million total subscribers, including print and digital
- The Times added 342,000 net new digital-only subscribers in Q4, a 35% increase over Q4 2018, and 134% more than Q4 2017.
- Of that total, 67.8%, or 232,000, subscribed to The New York Times’ news.
- The remaining 32.2%, or 110,000, subscribed to NYT Cooking or Crosswords.
- NYT Cooking enjoyed “a spectacular end to a strong year,” adding 68,000 net new subscriptions in the fourth quarter.
Thompson also addressed the 13% price increase for the The Times’ digital product. Subscribers will pay $2 more every four weeks, starting March 8.
“This week we begin to roll-out a price rise to a subset of our tenured digital-only news subscription base, which is the first price rise since the launch of the pay model in 2011. Since then, we’ve not only seen nine years of rising prices, but also unprecedented investment by The Times in its journalism and digital offerings and we believe that our loyal subscribers know that their financial contribution plays an essential role in maintaining the quality, breadth and depth of the report they value so much,” Thompson said.
[Editor’s note: I am apparently in that subset. I received a price increase notice via email last week.]
Other highlights from the company’s fourth quarter and full year 2019 results include the following:
- Total revenues for the fourth quarter increased 1.1% to $508.4 million. Subscription revenue increased 4.5%, ad revenue decreased 10.7%, and other revenue increased 30.2%.
- For the full year, total digital revenue was $800.8 million.
- Fourth quarter digital ad revenue decreased 10.8% to $92.2 million. Print advertising revenue decreased 10.5%.
- Other revenue increased $14.3 million, or 30.2%, driven by revenue from “The Weekly,” The Times’ new TV series and licensing revenue related to Facebook News.
- Operating costs for Q4 2019 was $430.4 million and adjusted operating costs for the quarter were $412.0 million. Both were increases over the prior year, primarily due to higher content costs, costs for “The Weekly,” and staffing growth for the newsroom and digital product development.
- Total net income was $68.2 million, compared to $57.0 million in Q4 2018.
- Diluted earnings per share were $0.41, compared to $0.33 per share in Q4 2018.
- As of December 29, 2019, the company had $683.9 million in cash and marketable securities. It has no remaining debt.
- On December 3, the company repurchased the condo interest in their company HQ for $245.3 million.
- The board of directors declared a $0.06 dividend per share for Class A and Class B common stock.
- Capital expenditures during the fourth quarter were $16 million, double capital expenditures in Q4 2018.
The company offered the following guidance for Q1 2020:
- Total subscription revenues in Q1 are anticipated to increase in the mid-single digits. Digital-only subscription revenue is expected to increase in the high-teens.
- Total advertising revenues in the first quarter are expected to drop approximately 10%. Digital ad revenue is expected to decrease in the mid-single digits.
- Other revenues in Q1 are anticipated to grow about 15%.
- Operating costs and adjusted operating costs are likely to increase between 5% and 7%.
In a time of hostile takeovers, mergers and acquisitions and newspapers shutting their doors after more than a century in business, it is refreshing to see a trusted legacy company like The New York Times Co. make a go of it. It has not been an easy road, but they have developed a slow, steady path to success that is paying off. Each quarter they report growth on the digital-only subscription front, as they continue to produce quality journalism and capitalize on their important role in democracy. In addition to their focus on digital, diversifying their revenue through “The Weekly” and their ownership of Wirecutter is also to their advantage. We expect that 2020 will be another year of slow and steady growth for The Times, getting them closer to their 2025 goal of 10 million subscribers.