The June quarter results from the New York Times showed why there is clear air between it and every other legacy media companies around the world.
The quarterly report with its single asset (the paper) it is getting more revenue from subscribers (which are at record levels) and making a profit, despite falls in both digital and legacy advertising in the three months.
Contrast the NYT’s performance to that of News Corp (controlled by the Murdoch family) which releases Friday morning its June quarter and 2019-20 results. News Corp is expected to reveal one of its biggest annual losses on record, thanks to asset write-downs and trading losses at its newspapers in Australia, the UK and at Foxtel, the 65% pay-TV business. The figure could be $US1 billion or more – it is dependant on whether the company impairs the value of its UK and Australian papers.
And while News Corp will again boast about its digital subscriber successes, especially for the Wall Street Journal, collectively these subscriptions will be well behind the record 6.9 million (at June 30) for the New York Times – for the paper, puzzles, cooking, romance, and other offerings.
The June quarter report from the Times disclosed that for the first time paper earned more of its revenue from digital: $US185.5 million, versus $US175.4 million from print, thereby emulating the Financial Times as the only print outlets to achieve that long-sought target.
The FT though has cut non-journalist staff numbers this year, frozen salaries, stopped new hires and curtailed travel, and other costs thanks to a sharp fall in revenue.
The NYT Co had already reached other targets — more subscriber revenue than ad revenue, more digital subs than print subs, and net revenue growth.
The Times also reported another record – best-ever quarterly subscription numbers, adding a record 669,000 new digital subs in the June quarter. Of that, the Times added 493,000 net new subscribers to its core newspaper product, and 176,000 to other digital products such as cooking and puzzles for net new digital additions of 669,000. At quarter-end, it had 5.7 million digital-only subscribers and 6.5 million total subscriptions.
In the first six months of 2020, the NYT has lifted total subscription numbers by over 1.25 million.
In 2016, the Times set an ambition of having 10 million digital subscribers by 2025. If it keeps adding new subscribers at this quarter’s pace, it would achieve that aim by early 2022, three years early.
The paper added 583,000 digital subscriptions in all of 2016; but added more than that in both the March and June quarters, thanks mostly to the antics of President Donald Trump who has been the saviour of the Times. When Trump took office, the Times reported 1.853 million total digital subscriptions; today it has 6.5 million)
Ad dollars in the June quarter were down an astonishing 43.9% in the June quarter; that included drops of 31.9% in digital and 55% in print. But the continuing surge in revenue from subscriptions (up 7.5% for the quarter) cut the fall in revenue to just 7.5%, or $US403.8 million for the quarter from $US436.3 million a year earlier.
The group said it still earned a net profit of $US23.7 million for the quarter, down from $US25.2 million a year earlier. Several years ago it would have reported a big loss and there would have been a lot of hand wringing about the paper’s shaky future. But it is a profit.
The Times has $US756.7 million in cash on hand — up almost 10% so far in 2020 — and has no outstanding debt.
And finally to illustrate the vast gulf between the Times and the rest of the US print industry (including its main rival the Wall Street Journal, owned by News Corp), McClatchy, the country’s second-biggest newspaper group in terms of owned titles, emerged from bankruptcy on Wednesday and was bought by a hedge fund for $US312 million or less than half the cash on hand that the Times had at June 30.
The Times’ share price is up more than 47% so far in 2020, News Corp’s share price is down 8%. At Wednesday’s close, the Times was worth $US7.86 billion compared with the $US7.88 billion for News Corp, most of which is based on the 61% of REA Group.