During the COVID-19 pandemic, being in the news business has not been easy, but there have been some silver linings in the dark clouds. Last week, for example, The New York Times Company reported that in the first quarter of 2020, they added 587,000 net new digital subscriptions, the highest in any quarter in company history. Of those, 468,000 subscriptions, or 80%, were for digital news. The remaining 119,000, or 20%, were for other digital products like Games and Cooking.

On an equally impressive note, at the end of April, The New York Times had more than 4 million subscribers to digital-only news, more than 5 million digital-only subscriptions, and more than 6 million total subscribers including digital and print.

“The New York Times is committed to delivering the most trustworthy news and useful guidance about the coronavirus and its consequences. Today, despite the many obstacles our newsroom is facing, we believe we are doing just that,” said Mark Thompson, president and CEO, in a May 6 news release.

“Our business model with its increasing emphasis on subscription revenue and reducing reliance on ad revenue and our fortress balance sheet puts us in a far better position than most media organizations, not just to successfully ride out the storm, but to thrive in a post Coronavirus world,” Thompson said on the earnings call. “But we should also have a humility to acknowledge that there is much we still don’t know and can’t predict about this pandemic and its economic impact. Patience, responsiveness, flexibility and resilience will all be key over the coming quarters. Our response to the crisis has so far been effective. We track the impact of the virus from the moment our reporters arrived on the ground and was hard to cover the first outbreak.”

There was bad news too, but it was expected. Advertising revenue declined 15.2%. Thompson said he expects it to decrease between 50% and 55% in the second quarter, compared to the second quarter of 2019. He believes the company will survive the pandemic. As a result of the lower ad revenue, the company will cut costs which could lead to “some job losses in the coming months,” but he did not expect them to be significant.

“The revenue from those subscriptions – and our strong balance sheet – give us real confidence, not just that we can remain financially sound through the pandemic, but also that we can safely invest in our digital growth strategy and continue to hire new talent to help execute it,” Thompson said.

Other first quarter highlights include:

• Total revenue was $443.6 million, a 1% increase year-over-year.
• Subscription revenue, which includes news, Cooking, Crossword and audio products, grew 5.4%.
• Other revenue grew $8.9 million, or 20.6%.
• Digital advertising decreased 7.9% to $51.2 million, and print ad revenue dropped 20.9%.
• The Times acquired Audm during the first quarter, which included approximately 20,000 subscribers.
• Operating costs wee $416.3 million, compared to $404.5 million in the first quarter of 2019.
• Operating profit was $27.3 million, compared to $34.6 million in the first quarter of 2019.
• Net income was $32.9 million, or $0.20 diluted earnings per share.
• The Times received three Pulitzer prizes.
• The company (temporarily) replaced its Travel and Sports sections with a new At Home section.
• The Times had 2.5 billion page views in March, double what they normally receive in a month.

The Times offered the following outlook for the second quarter of 2020:

• Total subscription revenue will increase in the mid- to high-single digits compared to the second quarter of 2020.
• Digital-only subscription revenue will increase in the high-twenties.
• Total advertising revenue will decline 50% to 55%, with digital advertising decreasing between 40% and 45%, primarily due to the COVID-19 pandemic.
• Other revenues are expected to decrease about 10% compared to the same period last year.
• Operating costs and adjusting operating costs will be flat or decrease slightly.

In terms of subscribers, on the earnings call, Meredith Kopit Levien, executive vice president and chief operating officer, said the company’s subscriber base continues to diversify. The newest subscribers tend to be younger and more diverse including geographic, racial and ethnic diversity. Subscriptions to both Cooking and Crossword products have been popular, and the company has done well with its Wirecutter affiliate revenue. Audio stories have also become very popular.

Since the earnings report came up, The New York Times (NYSE: NYT) saw a slight bump in its stock price. On May 6, stock was valued at $34.81 per share. In after hours trading on May 8, stock was valued at $35.79 per share.

Insider Take:

As Poynter’s Tom Jones notes in his May 7 column, The New York Times Company is not like any other media organization. You can’t really compare what is happening at The Times with other news organizations, at least not at the same scale, but The Times is experiencing what other news organizations are feeling – the pain of COVID-19. Advertising revenue was down significantly in the first quarter, and the second quarter looks to be far worse, going from a 15.2% decline to a decline between 50% and 55%. That’s huge. What The New York Times has going for it is a little different than other news organization – reputation, size, diversification and reserves.

The New York Times’ reputation alone has drawn so many new subscribers to it. Its sheer size – financially and in terms of its balance sheet – help insulate it from situations that would devastate a smaller organization. The Times also has revenue from many different sources, a strategy it has culled over the last several years, so that its eggs were not all in the ad revenue basket. And lastly, the company has money to fall back on.