The COVID-19 pandemic helped The New York Times Company stick to its strategic plan to grow subscription revenue, particularly digital-only subscription revenue last year. For the fourth quarter, The Times reported total revenue of $509.4 million. Of that total, $315.8 million, or about 62%, came from subscriptions; $139.3 million, or 27.3%, came from advertising revenue, and $54.3 million, or 10.7%, came from other revenue, including affiliate revenue from The Wirecutter.
The full year 2020 showed similar results:
| REVENUE STREAM | TOTAL (in millions) | % of TOTAL |
| Subscription revenue | $1,195.4 | 67% |
| Advertising revenue | $392.4 | 22% |
| Other revenue | $195.9 | 11% |
| TOTAL REVENUE | $1,783.7 | 100% |
Digital-only subscription revenue surpassed print subscriptions for the fourth quarter and the full-year. Subscription revenues break out as follows:
| Q4 2020 (in millions) | % of TOTAL SUBSCRIPTION REVENUE | Full Year 2020 (in millions) | % of TOTAL SUBSCRIPTION REVENUE | |
| DIGITAL-ONLY SUBSCRIPTION REVENUE | ||||
| News products | $151.0 | 90.4% | $543.6 | 90.9% |
| Other products | $16.0 | 9.6% | $54.7 | 9.1% |
| Sub-total digital-only subscriptions | $167.0 | 100% | $598.3 | 100% |
| Print subscription revenue | ||||
| Domestic home delivery | $132.4 | 89.0% | $529.0 | 88.6% |
| Single copy sales, NYT international and other subscription revenue | $16.4 | 11.0% | $68.1 | 11.4% |
| Sub-total print subscriptions | $148.8 | 100% | $597.1 | 100% |
| TOTAL SUBSCRIPTION REVENUE | $315.8 | $1,195.4 | ||
| DIGITAL SUBS AS % OF TOTAL | 52.9% | 50.1% | ||
| PRINT SUBS AS % OF TOTAL | 47.1% | 49.9% |
Digital-only subscribers far outpace print subscribers
At the end of the fourth quarter, The Times had 7,523,000 million subscribers: 6,690,00 million, or 89%, were digital-only subscribers (Game, Cooking, audio, other products) and 833,000, or 11%, were print subscribers. This is ahead of the organization’s goal to reach 10 million subscribers by 2025.
President and CEO remarks
Meredith Kopit Levien, The New York Times’ new president and CEO, as of September 8, 2020, remarked on the media climate as well as the organization’s quarterly and year-end results.
“2020 was a seismic year for news. The need for quality, independent journalism was as acute as ever in my lifetime, and my colleagues across The Times rose to meet that need with the energy and rigor our mission demands,” said Kopit Levien. “Our work, which was consumed at historic levels, led to a year of strong business results, including a record 2.3 million net new digital-only subscription additions, with 627,000 total net additions in the fourth quarter, 425,000 to our news product. At the end of 2020, The Times had 7.5 million total subscriptions across our digital and print products.”
Kopit Levien also commented on the milestones achieved during the year.
“In 2020, we reached two key milestones, both of which we expect to be enduring: digital revenue overtook print for the first time, and digital subscription revenue, long our fastest growing revenue stream, is also now our largest. Those two milestones, and our best year on record for subscriptions, mark the end of the first decade of The Times’s transformation into a digital-first, subscription-first company,” the president and CEO said.
Financial highlights
Additional financial highlights include the following:
- Total revenue of $509.4 million only represented a slight increase of 0.2% over fourth quarter 2019 revenue.
- Subscription revenue increased 14.7%, advertising revenue decreased 18.7%, and other revenue decreased 12.1%.
- Subscription revenue increases in Q4 2020 were led by the company’s digital-only subscription products including Games (previously called Crossword), Cooking and The Time’s audio products.
- Sales and marketing costs decreased 8.9% due to lower costs from advertising sales, and media expenses decreased 4.7%.
- Product development costs increased 23.2% as The Times focused on developing more digital products as part of its digital subscription strategic initiatives.
- For the fourth quarter, total net income was $10 million, or $0.06 diluted earnings per share, compared to $68.2 million, or $0.41 diluted earnings per share in Q4 2019.
- For the full year 2020, net income was $100.1 million, or $0.60 diluted earnings per share, compared to $140.0 million, or $0.84 diluted earnings per share.
Guidance for first quarter of 2021
On the earnings call, executive vice president and CFO Roland Caputo shared guidance for the organization’s first quarter of 2021 with the caveat that the pandemic may impact the outlook:
- Total subscriptions are expected to increase about 15% with digital-only subscription revenue increase 35% to 40%.
- Overall advertising revenue is expected to decrease in the high teens, and digital advertising revenue will increase slightly in the low to mid single digits.
- Other revenue is estimated to decrease between 10% and 15% because of fewer TV episodes.
- Operating costs and adjusted operating costs will increase in the mid single digits due to additional investment in digital subscription growth.
Insider Take
Despite blips that can be attributed to COVID-related advertising revenue drops, The New York Times had a good year in terms of subscriptions. Their digital-only subscription strategy is working with digital-only subscriptions surpassing print subscriptions. Investors remained slightly skeptical though. Stock dipped slightly from $51.68 on February 4, the day financials were reported, to $50.81 on Friday, February 5 at 4:59 p.m. EST. If The Times continues to execute with its digital-only subscription growth, it will hit its 10 million subscriber goal far ahead of 2025. It may even hit that goal by year end.
