The New York Times app displayed on a smartphone, held horizontally in a reader's hands

The New York Times Sees Significant Subscription Growth in Q1

The media organization ends the quarter with more than 9.7 million subscribers.

Last week, The New York Times Company reported its first-quarter 2023 financial results. The legacy media organization had many benchmarks during the quarter to celebrate, including significant subscription growth. The New York Times ended the quarter with just over 9.7 million subscribers, compared to 9.0 million subscribers for the first quarter of 2022. They reported 9.0 million digital-only subscribers, compared to 8.2 million for the prior year period.

“In the first quarter, we made steady progress on our essential subscription strategy, with clear signs of substantial runway ahead. We crossed 3 million bundle and multi-product subscribers in the quarter and hit a number of new records for bundle uptake; drove continued, sequential ARPU expansion as we fully applied our value-based pricing strategy; enjoyed the strongest enterprise-wise subscriber engagement we’ve seen in more than a year; and slowed cost growth for the third consecutive quarter through disciplined cost management,” said Meredith Kopit Levien, president and CEO of The New York Times Company, in a May 10, 2023 news release.

“We added 190,000 net new digital subscribers, bringing our total to more than 9.7 million. While advertising continues to experience near-term, cyclical challenges, our bundle strategy is gaining momentum, engagement metrics are strong, pricing initiatives are taking hold and we are slowing cost growth,” Levien added.

First-quarter financial highlights

In addition to the media organization’s subscription success, they reported the following financial highlights:

  • The New York Times Company had total revenue of $560.7 million, a 4.3% increase year-over-year. Of this total, $532.1 million is attributed to The New York Times Group and $28.6 million is attributed to The Athletic.
  • Total subscription revenue was $397.5 million, a 6.9% increase year-over-year. Subscription revenue increased due to growth in the number of digital-only subscribers, the number of subscribers whose introductory pricing increased during the period, subscribers who upgraded to a digital-only subscription bundle, and higher revenues from The Athletic standalone subscriptions. (In 2022, only two months of the first quarter of revenue for The Athletic was included. In 2023, a full three months of revenue was included.)
  • Total advertising revenue was $106.2 million, an 8.6% decrease year-over-year.
  • Other revenue, including increases in television, film, licensing and commercial printing revenue, was $57.0 million, a 15.8% increase year-over-year.
  • Print subscription revenue was $138.8 million, a decrease of 4.4%.
  • Digital-only subscription revenue was $258.8 million, a 14.1% increase year-over-year.
  • Digital-only subscriber ARPU was $9.04, compared to $9.13 in the first quarter of 2022.
  • Digital advertising revenue was $61.3 million, down 8.5% year-over-year.
  • The company had total operating costs of $532.8 million, a 7.3% increase year-over-year.
  • The company had $6 million in capital expenditures during the first quarter of 2023, compared to $10 million in the first quarter of 2022.
  • The adjusted operating profit for The New York Times Group was $61.8 million, an 8.8% decrease year-over-year.
  • The adjusted operating loss for The Athletic increased $1.0 million to $7.8 million, due to the reporting of an additional month in 2023.
  • Diluted earnings were share for the first quarter were $0.13, compared to $0.03 for the first quarter of 2022.
  • On March 31, the company reported cash and marketable securities of $474.4 million, a decrease of $11.9 million from the end of 2022.

Copyright © 2023 Authority Media Network, LLC. All rights reserved. Reproduction without permission is prohibited.

Second quarter guidance

The company provided the following guidance for the second quarter of 20203:

  • Digital-only subscription revenue: increase between 12% and 15%
  • Total subscription revenue: increase between 6% and 8%
  • Digital advertising revenue: decrease low-to-mid single digits
  • Total advertising revenue: decrease 4% to 8%
  • Other revenue: increase high-single digits
  • Operating costs: increase 6% to 8%
  • Adjusted operating costs: increase 6% to 8%

Subscription products and packages

As The New York Times marches toward its subscriber goal of 15 million by the end of 2027, it has developed a range of standalone and bundled subscription products. Their digital subscription package includes access to the digital news product, The Athletic, NYT Cooking, Games and Wirecutter. Standalone digital subscriptions include digital news product, The Athletic, Cooking, Games, Audm and Wirecutter.

For the first quarter, The New York Times Company had 3.02 million digital-only bundle and multiproduct subscribers, compared to 1.84 million in Q1 2022; 6.54 million digital-only subscribers to news, compared to 6.14 million in Q1 2022; and 3.27 million digital-only subscribers to The Athletic, compared to 1.22 million in Q1 2022.

Though the media organization focuses primarily on the number of subscribers, it does a separate count of subscriptions. The number of total subscriptions is higher because a subscriber may pay for more than one subscription product. At the end of the first quarter, the company reported the following subscriptions:

  • Digital-only subscriptions: 10.38 million
  • Print subscriptions: 700,000
  • Total subscriptions: 11.08 million

Insider Take

While The New York Times Company’s earnings fell short of Wall Street expectations of $0.167 diluted earnings per share, the media organization had a strong first quarter. The company saw increases in virtually every category, though there is room for improvement in advertising revenue, and The Athletic is still carrying a loss. The Times is a smart company with strong leaders, however. These misses are blips and to be expected in our current economy. Where they excel is pricing, product testing, package testing and revenue stream diversification. We think they will continue to have a strong year provided they continue to execute their subscription and diversification strategies. Their 15 million subscriber goal by the end of 2027 should be within “easy” reach.

Copyright © 2023 Authority Media Network, LLC. All rights reserved. Reproduction without permission is prohibited.

Up Next

Register Now For Email Subscription News Updates!

Search this site

You May Be Interested in: