2014 proved that news of the New York Times’ demise has been greatly exaggerated, yet not totally unfounded.
The Times yesterday released its revenue numbers for 2014. While they’re not exactly beating the band in terms of revenue growth, they are seeing the digital subscriber growth they need to remain viable in the years ahead.
The Times reported that operating profit was $91.9 million, down from $156.1 million in 2013, a decline attributed to increased spending on digital operations and paying severance packages as they recalibrated for the digital future. For the fourth quarter, operating profit only declined $6.5 million dollars from $68.9 million in 2013 to $62.5 million in 2014.
Even though there was a decline in profitability due to adjustments in business operations, there was good news on the digital subscription front. The Times finished 2014 with 910,000 paid digital subscribers, representing a year-over-year increase of 150,000 subscribers. CEO Mark Thompson said in a press release that the paper “(beat) our tally of net new additions in 2013 by 25 percent and (puts) us on track to exceed the one million digital subscriber milestone in 2015.” The company added 35,000 digital subscribers in the fourth quarter alone.
Digital advertising revenue also rose 12% in the last quarter of 2014 to $182 million, offsetting losses in print advertising and leaving total advertising revenues essentially flat compared with 2013. Thompson noted that this was “the most encouraging year-over-year trend since 2005.”
Despite this, according to the paper, “several new digital-subscription products like the apps NYT Now and NYT Opinion did not generate significant new revenue.”
Insider Take:
The New York Times is considered the paper of record for the United States, and how it goes, so goes the newspaper industry as a whole. Much was made when it introduced digital subscriptions and went to behind a paywall in 2011. Since then, it has recalibrated its operations to offset the losses in print advertising and circulation, with mixed results. In 2014 it laid off 100 of its newsroom staff and sold off profit-sapping assets like The Boston Globe. Longstanding rumors of a potential sale to Michael Bloomberg also lend credence to the importance of long-term profitability. These stabilizing actions, along with the growth in digital subscriptions, should make the paper viable at least for the near future as it continues to adapt to the new digital reality.
