With rapid digitization in the core areas of advertising and growing inclination of readers toward the Internet, newspaper companies started trimming their print operations and divert resources toward online publications.
The New York Times Company ( NYT Quick Quote NYT - Free Report) has been constantly making efforts to rapidly acclimatize to the changing face of the multiplatform media universe. This New York-based company has been keeping pace with the changing times by utilizing technological advancements to reach their target audience more effectively. Notably, the company’s business model with greater emphasis on subscription revenues bodes well. No wonder, declining print readership remains an area of concern. Subscription Revenues the Catalyst
The New York Times Company’s digital-only subscribers reached roughly 6,991,000 at the end of the first quarter of 2021, rising 301,000 sequentially and 1,990,000 year over year. Of the 301,000 total net additions, 167,000 came from the digital news product, while the remaining came from Cooking, Games and Audm products.
At the end of the quarter, the company had approximately 7,816,000 subscriptions across its print and digital products. Subscription revenues improved 15.3% to $329.1 million mainly on an increase in the number of subscriptions to the company’s digital-only products, which include news product as well as Games, Cooking and Audm products. Additionally, benefit from subscriptions graduating to higher prices from introductory promotional pricing aided subscription revenues. Revenues from digital-only products jumped 38.1% to $179.6 million. For the second quarter, management guided about 15% increase in total subscription revenues and a surge of approximately 30% in digital-only subscription revenues.
In first-quarter earnings release, Meredith Kopit Levien, president and CEO said, “The fundamental drivers of our business — audience, registered readers, and subscriber engagement — are stronger than in 2019 and position us well for long-term growth.”
Undeniably, advertising remains one of the significant sources of revenues for The New York Times Company. We note that total advertising revenues declined 8.5% during the first quarter of 2021, while print advertising revenues plunged 31.6%. Nonetheless, management expects second-quarter 2021 total advertising revenues to increase in the band of 55-60% with digital advertising revenues anticipated to surge roughly 70-75% primarily as a result of the impact of the comparison to weak revenues in the year-ago period on account of lower advertiser spending due to the onset of the pandemic. Wrapping Up
The New York Times Company has been diversifying business, adding new revenue streams, realigning cost structure and streamlining operations to increase efficiencies. This Zacks Rank #2 (Buy) company is not only gearing up to become an optimum destination for news and information but is also focusing on lifestyle products and services.
We note that shares of The New York Times Company have fallen 2.3% in the past one month compared with the industry’s decline of 1.7%. 3 Key Picks The E.W. Scripps Company ( SSP Quick Quote SSP - Free Report) reported an earnings surprise of 550% in the last reported quarter. The stock sports a Zacks Rank #1 (Strong Buy). You can see . the complete list of today’s Zacks #1 Rank stocks here Salem Media Group, Inc. ( SALM Quick Quote SALM - Free Report) has a trailing four-quarter earnings surprise of 163.2%, on average. Currently, the stock carries a Zacks Rank #2. Rogers Communications Inc. ( RCI Quick Quote RCI - Free Report) , which carries a Zacks Rank #2, has a long-term earnings growth rate of 7.5%. More Stock News: This Is Bigger than the iPhone!
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