Growth Slows: The NY Times Tops 7.8Million Subscribers

For the first quarter, The New York Times Company recorded its smallest gain in new subscribers in a year and a half.

The Times reported a total of 7.8 million subscribers across both print and digital platforms, with 6.9 million coming for online news or its Cooking and Games apps. The company added 301,000 digital customers for the first three months of the year, the lowest increase since the third quarter of 2019.

The Times is still on a path toward its goal of reaching 10 million subscribers by 2025, and it has improved its profit margins as its digital business — which costs less than print — continues to rise.

The company reported adjusted operating profit of $68 million, a 54 percent jump from last year, as it generated more dollars from each subscriber, partly because of the expiration of promotional rates as the new year rolled over. Total revenue rose modestly, about 6.6 percent, to $473 million. Online subscriptions and digital advertising together rose 32 percent, to $239 million, and the print business continued its steady decline.

For the first time, the company announced the number of readers it calls registered users — 100 million. Registered users can read a limited number of free articles before being asked to pay.

The Times met expectations for subscription sales, which rose 15 percent to $329 million; digital subscriptions vaulted 38 percent to $179.6 million. The surprise came from advertising, which fell 8.5 percent to $97 million. The company had expected ad revenue to decline by double that amount.

There was an unexpected bump during the quarter in digital advertising as revenue increased 16.3 percent to $59.5 million, largely from more direct sales of display banners and podcast commercials.

Operating costs rose slightly, to $421.4 million, an increase of a little more than 1 percent over last year. The company spent less on travel and entertainment expenses because of the pandemic, but it has hired more people. General and administrative costs rose 7 percent, to $56.6 million.

For the current quarter, The Times expects subscription revenues to increase 15 percent compared with last year. Revenue from digital subscribers is likely to rise 30 percent, the company said. That would be a slowdown from 2020, when The Times had a sharp gain in readership. It was one of the heaviest news cycles in recent memory, as the country was battered by the coronavirus pandemic, saw the rise of a social justice movement after the killing of George Floyd and voted in a hotly contested presidential election.

Advertising is expected to pick up mightily. The company estimates a 55 percent to 60 percent jump from last year, when ad spending was severely curtailed because of the pandemic. Digital advertising is likely to rise even more, at 70 percent to 75 percent. Costs are also expected to increase as the company plans to spend more marketing dollars to attract new subscribers. Capital spending should reach as much as $50 million this quarter.