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NY Times Banks on Strategic Plans, Ad Revenue a Concern
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The U.S. newspaper publishing industry has long been grappling with sinking advertising revenues. The downturn in the newspaper publishing industry witnessed over the last few years was aggravated as print readership declined, with more readers opting for online news, consequently making the print-advertising model increasingly irrelevant.
Advertising remains a significant source of revenue for The New York Times Company (NYT - Free Report) , which in turn is dependent upon the health of the economy. We observed that the company has been struggling with dwindling advertising revenue for quite some time now. Total advertising revenue dropped 6.9% during the first quarter of 2017. We observed that the rate of decline decelerated from 9.7% witnessed in the preceding quarter. Print advertising revenue fell 17.9% in the quarter under review, following a slump of 20.4% in the previous quarter.
However, digital advertising revenue surged 18.9% to $49.7 million, after witnessing an increase of 10.9% in the final quarter of 2016. Higher digital advertising revenue was driven by rise in revenues from mobile platform, programmatic buying channels and branded content, partly offset by a fall in traditional website display advertising.
Adapting to Changing Media Landscape
Consequently, The New York Times Company has been contemplating on new avenues of revenue generation. The 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 2,201,000 at the end of first-quarter 2017 – rising 348,000 sequentially (308,000 came from the digital news products and 40,000 from the Crossword product) and 62.2% 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 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 35.3% in the past six months and outperform the Zacks categorized Publishing-Newspapers industry’s rise of 2.3%.
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 to counter soft adverting revenue. The stock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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NY Times Banks on Strategic Plans, Ad Revenue a Concern
The U.S. newspaper publishing industry has long been grappling with sinking advertising revenues. The downturn in the newspaper publishing industry witnessed over the last few years was aggravated as print readership declined, with more readers opting for online news, consequently making the print-advertising model increasingly irrelevant.
Advertising remains a significant source of revenue for The New York Times Company (NYT - Free Report) , which in turn is dependent upon the health of the economy. We observed that the company has been struggling with dwindling advertising revenue for quite some time now. Total advertising revenue dropped 6.9% during the first quarter of 2017. We observed that the rate of decline decelerated from 9.7% witnessed in the preceding quarter. Print advertising revenue fell 17.9% in the quarter under review, following a slump of 20.4% in the previous quarter.
However, digital advertising revenue surged 18.9% to $49.7 million, after witnessing an increase of 10.9% in the final quarter of 2016. Higher digital advertising revenue was driven by rise in revenues from mobile platform, programmatic buying channels and branded content, partly offset by a fall in traditional website display advertising.
Adapting to Changing Media Landscape
Consequently, The New York Times Company has been contemplating on new avenues of revenue generation. The 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 2,201,000 at the end of first-quarter 2017 – rising 348,000 sequentially (308,000 came from the digital news products and 40,000 from the Crossword product) and 62.2% 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 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 35.3% in the past six months and outperform the Zacks categorized Publishing-Newspapers industry’s rise of 2.3%.
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 to counter soft adverting revenue. The stock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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