During the fourth quarter of 2022, The New York Times Company reported double-digit increases, fueling revenue and subscription growth, ending the year on a positive note. Total revenue for the quarter was $667.5 million, a 12.3% increase year-over-year. Subscription revenue was $414.1 million, an increase of 12.1% year-over-year. Subscription revenue is now 62% of total revenue. Advertising revenue for the quarter was $179.2 million, a 1.4% increase year-over-year, and other revenue was $74.3 million, a 12.1% increase year-over-year. The company’s fiscal year had an additional six days in it, so the revenue reconciliation excludes the estimated impact of those six days.

Meredith Kopit Levien, president and CEO of The New York Times Company, commented on the results.

“2022 was the first full year of executing our strategy to become the essential subscription for every English-speaking person seeking to understand and engage with the world. We are proud of our results, which reflect the differential value of our expanded product portfolio; the multi-revenue stream nature of our model; strong unit economics; and disciplined cost management,” Levien said in a February 8, 2023 news release.

“We are entering 2023 with meaningful momentum toward our goal of 15 million subscribers by year end 2027. While our path to getting there is unlikely to be linear, we have deep conviction in our market opportunity and ability to create value for shareholders,” she added.

Levien also noted that, with each quarter, they are seeing a stronger demand for bundled products like news and lifestyle products. They are hitting records in terms of total bundle volume and the share of new subscribers who sign up for subscription bundles. As an example, customers can purchase a gift subscription for $100 for 12 months that includes News, Games, Cooking, Wirecutter and The Athletic. Other subscriptions are priced separately. The New York Times News subscription is $75 for 12 months, showing that the bundle is more cost effective – and more attractive – to potential subscribers. These are significant opportunities for The Times to generate more subscription growth.

[Editor’s Note: I am already a subscriber, so the bundles and prices that are offered to me may be different that those presented to another prospective subscriber.]

In addition, standalone digital subscriptions are available: digital news, The Athletic, Games, Cooking, Audm and Wirecutter.

Subscription highlights

The New York Times shared additional subscription highlights for the fourth quarter:

• Subscription revenue increased primarily due to a large number of subscribers who converted to higher priced subscriptions after their introductory promotion concluded. The company also saw subscription growth in digital-only subscriptions, subscription revenue from The Athletic, and six additional days in the quarter.
• Subscription revenue from digital-only products for Q4 was $269.2 million, a 31% increase, while print subscription revenue was $144.9 million, a 0.6% decrease year-over-year. The print decline was due to fewer domestic home delivery subscriptions. Total subscription revenue for the full year was $1.56 billion, a 14.0% increase year-over-year.
• At the end of the fourth quarter, The New York Times had approximately 9.55 million paid subscribers with approximately 10.98 million paid subscriptions across print and digital. About 8.83 million were paid digital-only subscribers with approximately 10.26 million paid digital-only subscribers. In February 2022, The New York Times raised their subscriber goal from 10M to 15M by the end of 2027.
• There was a net increase of 240,000 digital-only subscribers and 240,000 digital digital-only subscriptions. Compared to the fourth quarter in 2021, there was a net increase of 1,010,000 digital-only subscribers and 1,100,000 digital-only subscriptions, resulting from the acquisition of The Athletic in January 2022.
• The Athletic has revenue of $29.9 million in the fourth quarter, mostly from subscription revenue. However, at the end of the quarter, they had an adjusted operating loss of $6.9 million. The Athletic is considering ticketing, merchandising and betting as potential paths toward profitability, reports Digiday.

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Outlook for Q1 2023

The New York Times provided the following estimates for revenue and costs for the first quarter of 2023.

• Digital-only subscription revenue will increase between 13% and 16%.
• Total subscription revenue will increase between 6% to 9%.
• Digital advertising revenue will decrease in the low-single digits.
• Total advertising revenue will decrease in the low-single digits.
• Other revenue will increase in the mid-single digits.
• Operating costs and adjusted operating costs will increase 6% to 8%.
• Capital expenditures will be approximately $50 million.

New York Times stock price

On February 8, The New York Times jumped from $36.71 per share to $41.13. As of 4 p.m. Eastern yesterday, their stock was at $39.88, well above the 52-week low and inching toward the company’s 52-week high.

Insider Take

Because of The New York Times Company’s strategy of revenue diversification and mindful spending, quarter after quarter, they produce impressive results, particularly in terms of subscription growth. They have diversified revenue by creating standalone products (NYT Cooking, Games, etc.) that people love, they have acquired The Athletic and Wirecutter, and they are learning what bundles and pricing works for them. The New York Times Company is the gold standard in media. Steady growth, a range of revenue sources, and products and pricing that their subscribers love.

Takeaways for subscription companies: It would be impossible to duplicate the reputation and success of The Times, but there are lessons that other subscription companies can take away. Creating a range of lovable products at affordable price points makes The New York Times hard to leave. They have finetuned their offerings and used the resulting data to determine what works, customizing offers and getting results. This shows that you don’t have to make big splashes to grab subscribers’ attention. Slow and steady is a solid, strategic play.

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