The New York Times hit 7 million paid subscribers in October, about 106,000 more subscribers than the newspaper had at the end of the third quarter. The New York Times Company also reported that, for the second quarter in a row, the newspaper’s total digital revenue exceeded print revenue. Perhaps more notably, total digital-only subscription revenue exceeded print subscription revenue for the very first time.

Comments from president and CEO Meredith Kopit Levien

Meredith Kopit Levien, who became president and CEO in September, commented on the organization’s third quarter results.

“In this unprecedented moment in the country and the world, our strategy of making journalism worth paying for continues to prove itself out, and our newsroom’s extraordinary work across a range of subjects and formats continues to drive more people to engage with The Times, form a habit, pay and stay,” said Kopit Levien.

“We ended the quarter with approximately 6.9 million total subscriptions, and crossed the 7 million mark in the month of October, an increase of 2 million digital-only subscriptions over the last year and 393,000 over the last quarter. The news cycle certainly played a role, but as we are increasingly seeing with each passing quarter, so too did the breadth of our coverage and our improving ability to mean more to more people. The continued demand for quality, original, independent journalism across a range of topics makes us even more optimistic about the size of the total market for digital journalism subscriptions and our position in it,” Kopit Levien added.

Third quarter highlights

Other highlights for the quarter include the following:

• The New York times has total revenue of $426.9 million, a decrease of 0.4% year-over-year.
• Subscription revenue was $301.0 million, a 12.6% increase over subscription revenue of $267.3 million in Q3 2019.
• Revenue from digital-only subscription products was $155.3 million, a 34% increase.
• Print subscription revenue was $145.7 million, a 3.8% decrease, primarily due to lower newsstand revenue.
• Revenue from domestic home delivery subscription products increased 2.5%
• Advertising revenue was $79.3 million, a 30.2% decrease over Q3 2019 revenue of $113.5 million.
• Digital advertising revenue decreased 12.6%, and print ad revenue decreased 46.5%.
• Print advertising decreased due to the COVID-19 pandemic and less advertising in luxury, entertainment, media and home furnishings categories.
• Other revenue was $46.7 million, a 2% decrease.
• The company had 6,894,000 print and digital subscribers at the end of the quarter.
• Paid digital-only subscribers were approximately 6,063,000, a net increase of 393,000 (275,000 from digital news and 118,000 from Cooking, Games and audio products) compared to the second quarter of 2020 and a net increase of 2,010,000 over the third quarter of 2019.
• Total operating costs were $387.3 million, a 3.5% decrease year-over-year.
• Net income was $33.6 million, or $0.20 diluted earnings per share.
• As of September 27, 2020, the organization has $800.1 million in cash and marketable securities.

Fourth quarter guidance

• Total subscription revenue is estimated to increase about 14% with digital-only subscriptions expected to grow about 35%.
• Total advertising revenue for the fourth quarter will decline by about 30% with digital ad revenue decreasing in the mid-teens, due to the pandemic.
• Other revenue will decrease about 15% because of fewer TV episodes and live events.
• Operating costs and adjusted operating costs will be flat or decrease in the low single digit due to cost-cutting measures while driving digital subscription growth.

Insider Take

Despite the pandemic and claims by President Donald Trump that The New York Times is “failing,” the news organization is doing anything but that. In fact, despite suffering from advertising losses, the organization managed to achieve higher net income in the third quarter of 2020 compared to the same period last year. They also grew their subscriber base and grew digital-only subscription revenue sufficiently to overtake print revenue. That is impressive, and we expect to see more of the same in the fourth quarter.