How NY Times (NYT) Is Countering Soft Advertising Demand
Zacks Investment Research | Jun 25, 2017 09:09PM ET
The New York Times Company (NYSE:NYT) has been struggling with dwindling advertising revenues for quite some time now. Analysts pointed that increasing online readership has made the print-advertising model redundant. Nevertheless, the company has been contemplating new avenues of revenue generation in a bid to counter the same.
Areas to Counter
The U.S. newspaper publishing industry has long been grappling with sinking advertising revenues. The downturn in the newspaper publishing industry witnessed in the last few years was aggravated as print readership declined.
Advertising remains a significant source of revenue for The New York Times Company, 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, following declines of 9.7%, 7.7%, 11.7% and 6.8% witnessed in the fourth, third, second and first quarters of 2016, respectively. Maintaining the same chronological order print advertising revenue fell 17.9%, 20.4%, 18.5%, 14.1% and 9%, respectively.
Strategies Adopted
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. (NYSE:NEWM) , Gannett Co., Inc. (NYSE:GCI) and The McClatchy Company (NYSE:MNI) are also trying to adapt to different revenue generating ways. These endeavors have led the stock to increase roughly 22.5% in the past three months and outperform the Zacks categorized Zacks Investment Research
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