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How NY Times (NYT) is Countering Soft Advertising Demand
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The New York Times Company (NYT - Free Report) has been struggling with dwindling advertising revenue for quite some time now. Analysts pointed that increasing online readership has made the print-advertising model redundant. Nevertheless, the company has been contemplating new avenues of revenue generation in a bid to counter the same.
Areas to Counter
The U.S. newspaper publishing industry has long been grappling with sinking advertising revenues. The downturn in the newspaper publishing industry witnessed in the last few years was aggravated as print readership declined. The New York Times Company’s total advertising revenue dropped 9.7% during the fourth quarter of 2016. Print advertising revenue fell 20.4% in the fourth quarter, following a decline of 18.5% in the preceding quarter. Management expects total advertising revenue in the first quarter of 2017 to decline in the high-single digits.
Further, a look at the company’s performance in fiscal 2016 unveils that total revenue declined 1.2%, 2.7%, 1% and 1.1% in the first, second, third and fourth quarters, respectively. Maintaining the same chronological order, we note that earnings per share fell 9.1%, 15.4%, 33.3% and 18.9%, respectively.
Adapting to Changing Media Landscape
Consequently, The New York Times Company is adapting to the changing face of the multiplatform media universe, and has already included mobile and reader application products in portfolio. Other publishing companies such as New Media Investment Group Inc. , Gannett Co., Inc. (GCI - Free Report) and The McClatchy Company are also trying to adapt to different revenue generating ways.
The New York Times Company is concentrating on online activities, as evident from its pay-and-read model. Its pricing system for NYTimes.com was launched on Mar 28, 2011. The company notified that the number of paid digital subscribers reached 1,853,000 at the end of the fourth quarter – rising 296,000 sequentially (276,000 came from the digital news products and 20,000 from the Crossword product) and 45.9% year over year.
The company is not only gearing up to become an optimum destination for news and information but is also now focusing on service journalism, with verticals like Cooking, Watching and Well. In this regard, it recently acquired The Wirecutter and its sister site, The Sweethome that recommends people about technology gear, home products and other consumer services. The company also acquired a digital marketing agency and portfolio company, HelloSociety, from Science Inc., which complements its T Brand Studio that helps in creating digital ad innovation and branded content.
These endeavors have led the stock to increase roughly 20.3% in the past six months and outperform the Zacks categorized Publishing-Newspapers industry’s decline of 5.6%.
Bottom Line
The New York Times Company remains committed to streamlining cost structure, strengthening balance sheet, and rebalancing portfolio. The company’s initiatives remain well on track but soft adverting revenue forecast raises concern among investors.
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How NY Times (NYT) is Countering Soft Advertising Demand
The New York Times Company (NYT - Free Report) has been struggling with dwindling advertising revenue for quite some time now. Analysts pointed that increasing online readership has made the print-advertising model redundant. Nevertheless, the company has been contemplating new avenues of revenue generation in a bid to counter the same.
Areas to Counter
The U.S. newspaper publishing industry has long been grappling with sinking advertising revenues. The downturn in the newspaper publishing industry witnessed in the last few years was aggravated as print readership declined. The New York Times Company’s total advertising revenue dropped 9.7% during the fourth quarter of 2016. Print advertising revenue fell 20.4% in the fourth quarter, following a decline of 18.5% in the preceding quarter. Management expects total advertising revenue in the first quarter of 2017 to decline in the high-single digits.
Further, a look at the company’s performance in fiscal 2016 unveils that total revenue declined 1.2%, 2.7%, 1% and 1.1% in the first, second, third and fourth quarters, respectively. Maintaining the same chronological order, we note that earnings per share fell 9.1%, 15.4%, 33.3% and 18.9%, respectively.
Adapting to Changing Media Landscape
Consequently, The New York Times Company is adapting to the changing face of the multiplatform media universe, and has already included mobile and reader application products in portfolio. Other publishing companies such as New Media Investment Group Inc. , Gannett Co., Inc. (GCI - Free Report) and The McClatchy Company are also trying to adapt to different revenue generating ways.
The New York Times Company is concentrating on online activities, as evident from its pay-and-read model. Its pricing system for NYTimes.com was launched on Mar 28, 2011. The company notified that the number of paid digital subscribers reached 1,853,000 at the end of the fourth quarter – rising 296,000 sequentially (276,000 came from the digital news products and 20,000 from the Crossword product) and 45.9% year over year.
The company is not only gearing up to become an optimum destination for news and information but is also now focusing on service journalism, with verticals like Cooking, Watching and Well. In this regard, it recently acquired The Wirecutter and its sister site, The Sweethome that recommends people about technology gear, home products and other consumer services. The company also acquired a digital marketing agency and portfolio company, HelloSociety, from Science Inc., which complements its T Brand Studio that helps in creating digital ad innovation and branded content.
These endeavors have led the stock to increase roughly 20.3% in the past six months and outperform the Zacks categorized Publishing-Newspapers industry’s decline of 5.6%.
Bottom Line
The New York Times Company remains committed to streamlining cost structure, strengthening balance sheet, and rebalancing portfolio. The company’s initiatives remain well on track but soft adverting revenue forecast raises concern among investors.
Given the pros and cons embedded, the stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>