With rapid digitization in the core areas of advertising and the growing inclination of readers toward the Internet, newspaper companies have been diverting resources toward online publications.
The New York Times Company ( NYT Quick Quote NYT - Free Report) has been making consistent efforts to rapidly adjust to the changing face of the multiplatform media universe. This New York-based company has been keeping pace with changing times by utilizing technological advancements to reach the target audience more effectively. Its business model, with a greater emphasis on subscription revenues, bodes well. Subscription Revenues a Key Driver
The New York Times Company ended the second quarter of 2022 with roughly 9.17 million paid subscribers, with approximately 10.56 million paid subscriptions across its print and digital products. Of the 9.17 million subscribers, about 8.41 million were paid digital-only subscribers, with approximately 9.81 million paid digital-only subscriptions.
Net increases of 180,000 and 230,000 were registered in digital-only subscribers and digital-only subscriptions, respectively, compared with the end of the first quarter of 2022. There was a net increase of 1,200,000 digital-only subscribers and 1,480,000 digital-only subscriptions compared with the second quarter of 2021. This excludes about 1,029,000 subscribers and 1,161,000 subscriptions that were added as a result of the buyout of The Athletic in the first quarter of 2022. The Athletic had a net increase of 50,000 standalone subscribers in the quarter. Additionally, late in the quarter, The New York Times Company started giving its Bundle subscribers access to The Athletic, which added roughly 420,000 Subscribers with The Athletic. As a result, the total growth in Subscribers with The Athletic was approximately 470,000 in the second quarter.
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In the second quarter of 2022, subscription revenues grew 13.1% year over year to $383.6 million, primarily due to an increase in the number of subscribers to the company’s digital-only products, the benefits of subscriptions graduating to higher prices from introductory promotional pricing and the inclusion of subscription revenues from The Athletic. Subscription revenues from digital-only products jumped 25.5% to $238.7 million.
Management envisions total third-quarter subscription revenues to increase about 11-13%, while digital-only subscription revenues are anticipated to rise approximately 21-25%. The New York Times Company’s three-to-five-year target includes 15 million total subscribers by year-end 2027. Management expects total third-quarter subscription revenues to increase 5-7% at The New York Times Group and foresees a 5 to 7 percentage points contribution from The Athletic to consolidated results. Wrapping Up
The New York Times Company, which carries a Zacks Rank #3 (Hold), has been diversifying the business, adding revenue streams, realigning the cost structure and streamlining operations to increase efficiency. The company is not only gearing up to become an optimum destination for news and information but also focusing on lifestyle products and services.
Shares of The New York Times Company have advanced 4.8% in the past six months compared with the industry’s growth of 10.9%. 3 Key Stocks
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