New York Times reports US$24m profit, thanks to digital subscribers

People taking part in a protest outside the New York Times in February 2018.
People taking part in a protest outside the New York Times in February 2018.PHOTO: AFP

NEW YORK (NYTIMES) - The New York Times continued its digital growth in the second quarter of 2018, adding 109,000 digital-only subscribers. With the larger audience came an increase in revenue that counteracted a decline in print advertising.

The company said on Wednesday (Aug 8) that revenue from digital subscriptions rose to US$99 million (S$135 million) in the second quarter, a jump of nearly 20 per cent compared with the same period a year ago.

Overall for the second quarter, total revenue increased 2 per cent, to US$415 million, and the company reported a profit of almost US$24 million.

The Times now has 2.9 million digital-only subscribers, out of 3.8 million total.

"Subscription revenues accounted for nearly two-thirds of the company's revenues, a trend we expect to continue," Mr Mark Thompson, the company's chief executive, said in a news release.

"We continue to believe that there is significant runway to expand that base substantially."

Other company revenue grew 40 per cent in the second quarter, largely as a result of the company's agreement with Newsday to print and distribute its publications.

Other sources of revenue included the renting of an additional four floors in the New York headquarters and the success of Wirecutter, a review and recommendation website bought by The Times in 2016.

Even with the rise in digital subscriptions, the company had a 10 per cent decline in advertising revenue, with digital advertising revenue falling 7.5 per cent, to US$51 million. Print advertising revenue decreased in the second quarter of the year by 11.5 per cent, to US$68 million.

The second quarter of 2017, during which digital advertising experienced a 23 per cent increase, was an outlier, thanks, in part, to the so-called Trump Bump.

"This is a subdued quarter for digital advertising, as we predicted, but we remain confident that we will return to strong year-over-year growth in the third quarter," Mr Thompson said.

Operating profit for the second quarter increased to US$40 million, from US$26.5 million in the same period last year. Adjusted operating profit, the company's preferred method of assessing performance, decreased to US$59 million in the second quarter, compared with US$65 million last year.

Operating costs decreased to US$373 million, nearly US$6 million less than in the second quarter of 2017, mostly because of lower severance costs and growth in commercial printing.

Mr Thompson said he expected total subscription revenue to continue to grow. The company also expects a 10 per cent increase in digital advertising in the next quarter and an overall advertising revenue decrease in the low single digits.