More than 2,000 job cuts in old print and new online media businesses have been announced in the US and around the world in the past 10 days – from Buzzfeed to Gannett and McClatchy, HuffPost and Vice, the gloom has been pervasive and hard to resist. The most common factor cited for the cuts – weak digital ad revenues and indifferent subscriber growth – or very little.
Overnight Wednesday a very different story from the company five years ago that was on most lists to fail – The New York Times Co. The company revealed another set of strong quarterly figures for the December quarter and 2018 and set itself an ambitious target for 2025 – 10 million subscribers for its online and print operations more than double the 4.3 million at the end of 2018.
The shares rose more than 12% at one stage and ended up nearly 11%, with the share price at a 14 year high.
New York Times Co’s quarterly report details its continuing success in boosting subscriber revenues, which now are more than 60% of total company revenues. That success was absent at fellow publishers, McClatchy and Gannett and online businesses, Vice, HuffPost, and Buzzfeed (and the other smaller operators which closed or were sold last year such as Mic and Mashable).
The company said it added 265,000 net new digital subscriptions in the final three months of last year and ended 2018 with 3.4 million online subscriptions (up 27% from 2017) and 4.3 million total subscriptions. The quarterly boost was the most since the final quarter of 2016 when the main driver was the election of Donald Trump as US President.
The surge in digital subscribers helped push quarterly revenues up 4% to $US502.7 million – well above market estimates around $US480 million. For the year Online subscription revenue rose nearly 18% to $US400 million (of total subscription revenues of $US1.078 billion), while digital advertising rose 8.6%, to $US259 million.
40% of total revenues in 2018 of $US1.7 billion came from digital subscriptions and advertising. The company reported a profit of $US57 million compared with a loss of $US56.8 million in the final quarter of 2017 because of higher pension charges and Trump’s corporate tax reform which saw a write-down in the value of retained tax losses.
The best sign of its return from the dead was the decision to lift quarterly dividend 25% to five US cents a share from 4 US cents.
The paper’s continuing ability to attract subscribers makes a mockery of Trump’s mendacious claims that the Times peddles fake news and is “failing” and that its subscriber numbers are “dwindling”. That’s far from the truth as the quarterly report underlines. The company now wants to build on its success – it is now the biggest selling daily paper in developed countries. And not a mention of Facebook and Google in the quarterly statement.
“Our appeal to subscribers — and to the world’s leading advertisers — depends more than anything on the quality of our journalism,” CEO Mark Thompson said in the earnings release. “That is why we have increased, rather than cut back, our investment in our newsroom and opinion departments. We want to accelerate our digital growth further, so in 2019, we will direct fresh investment into journalism, product, and marketing…“We ended 2018 with $709 million in total digital revenue.
This means that after just three years, we are already three-quarters of the way to achieving our five-year goal of doubling digital revenue to $800 million by 2020. As a result, we are setting ourselves a new goal – to grow our subscription business to more than 10 million subscriptions by 2025.
News Corp releases its quarterly figures today and we can expect similar success stories from its key papers – the Wall Street Journal, the London Times and Sunday Times and the Australian, but not from other papers or its Foxtel business, now 65% owned.