For the first time in the company’s history, The New York Times Co. posted more quarterly revenue in its digital sector than it did with print operations. The announcement triggered a 1.26% increase in its stock price, which has risen almost 44% this year, to hit $47.38 before the closing bell. The Times’ stock hasn’t traded at that level in nearly 20 years.
Although, and like most businesses, the COVID-19 pandemic has hurt its bottom line, particularly in advertising, the 170-year-old newspaper giant still reported an overall profit in the quarter. It reported a profit of $23.7 million, which was down from $25.2 million during the same period in 2019.
JPMorgan had projected 380,000 digital subscribers would be added during the quarter, but The Times added 669,000. With many physical newsstands closed during the pandemic, revenue from print subscriptions and sales dropped 6.7%. However, when factoring in both digital and print subscription revenue, overall subscription revenue grew 8.4% from the same time last year.
Advertising revenue was another story. Revenue from that sector plummeted 43.9% in the second quarter. That created a drop in overall revenue, year-over-year, of 7.5%. The silver lining to that cloud? Digital advertising revenue accounted for 58.3% of its total advertising sales. During the same quarter last year, that number was just 48.1%.
"Print advertising revenue decreased as the COVID-19 pandemic further accelerated secular trends, largely impacting the entertainment, luxury, and technology categories," the company said in a statement.
With steadily falling print circulation numbers for years, it has been no secret that the media industry, especially print media, have needed to find a way to gain revenue from the digital sector. The Times was one of the first to make a concentrated effort to do so. Despite much resistance, early on it embraced paywalls and subscriptions in order to read its articles. The hope was that, eventually, readers would pay to read high-quality journalism, whether in digital or print format. With its most recent earnings report, it appears those efforts are finally paying off.
“The Times’ physical paper remains very strong, which is why it’s taken a while to see this crossover point. But digital has grown enormously over the last eight years when I’ve been chief executive,” CEO Mark Thompson said. “And we don’t think it’s likely we’re going to go back from this moment.”
In a play to diversify its revenue further, the company also added to it’s growing audio operations. In late July, The Times announced an agreement to purchase podcasting group Serial Productions and a partnership with ‘This American Life.’ Both are considered giants in the podcasting industry.