More room for digital subscriber growth at the New York Times, and other items from the call
New York Times Co. impressed investors Thursday with its fourth-quarter results, as paid digital subscribers to the Times and the International Herald Tribune climbed 13% since just the end of the third quarter, to 640,000, helping to fuel a 16% gain in circulation revenue.
The stock was up 7% at midday.
A few items of note from the earnings call:
1. Denise Warren, chief advertising officer of New York Times Media Group, said that even with the phenomenal growth the New York Times has seen in digital subscriptions, the company still sees room for growth in the corporate, education and international markets.
There’s just no question that the New York Times, for all the criticisms heaped upon it from various quarters, is one of a handful of journalism brands that is not only trusted, but is seen as indispensable. The management team understands that, and is proceeding accordingly.
2. On a related note, Warren said the company is considering a number alternatives for its paywall, including a price increase.
Chief Financial Officer Jim Follo pointed out that a price increase for home delivery of the Times in the current quarter — after an increase last year — has had no adverse impact on circulation growth, suggesting that the company is confident that it can ask for at least a little bit more for access digital editions, which include the mobile app as well as the traditional online platform.
3. Follo said the advertising landscape in the first quarter remains “challenging” after a December period that saw print advertising revenue fall 5.6%; excluding an additional week in the quarter, print ad sales would have plunged 10.2%.
On the digital ad front, Warren said that marketplace wasn’t helped in Q1 by uncertainty related to the “Fiscal cliff” negotiations and the aftermath, along with the uneven economic recovery.
4. CEO Mark Thompson, on his first earnings call since assuming the role last November, said that the company does not plan to restore its dividend in the near future, despite sitting on $955 million in cash.
There are too many “uncertainties” surrounding print advertising, he said, and between ongoing deleveraging efforts, underfunded pensions, and a strategic review to identify a growth strategy, this just isn’t the right time.
5. Though Thompson said the company wants to “invest in the digital growth of The New York Times digital products and services at home and abroad,” he thinks it can be “more efficient,” and therefore “more cost-cutting is inevitable.”
That old sweet song.
Executive Editor Jill Abramson said in December that 30 newsroom buyouts would be necessary to avoid a big round of layoffs. Though she told staffers last week that there had been “far fewer” firings than had been feared, more people will have to be sent packing.
— David B. Wilkerson