Changing consumer preferences and innovative technologies have altered the way in which news is offered and consumed. Readers’ preference for accessing news online, mostly free, has made the industry’s print-advertising model increasingly redundant. As readers started thronging the Internet for news, advertisers followed suit, and so did the newspaper companies.
Trimmed print operations paved the way for online publications that led to the development of a pay-and-read model, as adopted by The New York Times Company (NYT - Free Report) . The company is fast acclimatizing to the changing face of the multiplatform media universe and has already included mobile and reader application products in its portfolio.
The New York Times Company has been realigning cost structure and streamlining operations to increase efficiencies. The company is not only gearing up to become an optimum destination for news and information but is also focusing on lifestyle products and services.
A Brief Introspection of NYT
The New York Times Company has been contemplating new avenues of revenue generation in a bid to counter dwindling print advertising revenues. We note that print advertising revenues fell 11.9% in the first quarter of 2019.
The company is concentrating on online activities. We note that the number of paid digital subscribers reached 3,583,000 at the end of first quarter of 2019 – rising 223,000 sequentially and 28.7% year over year. Subscription revenue grew 3.9% principally due to increase in the number of subscriptions to the company’s digital-only products. Revenue from digital-only subscriptions products jumped 15.1%.
Management now projects total subscription revenue in the second quarter to increase in the low to mid-single digits, while digital-only subscription revenue is likely to rise in the mid-teens. The company has set a goal to reach more than 10 million subscriptions by 2025.
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The New York Times Company is not only gearing up to become an optimum destination for news and information but is also 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 technology gear, home products and other consumer services.
The company also acquired a digital marketing agency and portfolio company, HelloSociety, from Science Inc. The buyout complements its T Brand Studio that helps in creating digital ad innovation and branded content. Further, it launched digital subscriptions for NYT Cooking, its popular recipe site and app.
The New York Times Company is diversifying business, adding new revenue streams, strengthening balance sheet and restructuring portfolio. It offloaded assets in order to re-focus on its core newspapers and pay more attention to online activities. 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 ways of revenue generation.
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