The New York Times Company gains 180,000 digital subscribers

The New York Times Co. announced on Wednesday (2) that it gained 180,000 digital subscribers in the second quarter and raised its profit forecast for this year.

The company said the revenue added by new subscribers offset the higher operating costs of The Athletic, the sports news site that The New York Times bought in January.

Overall, the company posted an adjusted operating profit of US$69 million (R$347.4 million) for the quarter, up from the US$65 million recorded in the period a year ago. The Athletic lost $9.6 million for the period, and lost $29 million since it was acquired.

Meredith Kopit Levien, chief executive of The New York Times Co., said the company expects to end the year with adjusted operating income of between $320 million and $330 million. 66 billion), which is close to the upper end of the projected range in February.

The focus of the company’s strategy is to create packages of its digital products, which include the Cooking, Wirecutter and now The Athletic websites, in addition to its basic journalistic product. The expectation is that readers are willing to pay more to have access to more than one product.

ValueAct, an activist investment firm, announced in August that it had acquired 7% of the common stock of The New York Times Co. and that it would put pressure on the news organization to more vigorously promote its subscription packages.

Levien reported that the company had passed the one million subscriber mark for content packs.

This is the second straight quarter that The New York Times Co. wins 180,000 new subscribers for its digital products of all kinds. The company now has a total of 9.33 million subscribers, and they account for 10.75 million paid subscriptions for print and digital products. The group remains well on track towards its goal of reaching the 15 million subscriber mark by the end of 2027.

“The most important story of our third quarter was the continued progress in package sales, with growing evidence that our strategy is working,” Levien said in a statement. “It was our best quarter in terms of net sales of new packages.”

The New York Times Co.’s operating costs grew by 9.5% year-on-year to $503.8 million. The company spent 24% more on product development than in the same quarter last year, while sales and marketing costs dropped 22.7% to $64.7 million. The company also hired additional staff for its newsrooms.

While the advertising market is slowing in the face of recession fears, The New York Times Co. digital advertising revenue rose 4.9% to $70.3 million from the period in 2021, even as print advertising declined. The rise in digital ads is due in part to The Athletic, which has recently started running ads. In total, ad revenue declined by 0.4% to $110.5 million.

The New York Times Co. forecasts 17% to 20% growth in subscription revenue for the fourth quarter of 2022, but expects total advertising revenue to decline by about 5% over the period.

Translation by Paulo Migliacci