NY Times (NYT) Digitalization Mantra Paying Off Quite Well
Zacks Investment Research | Jun 10, 2018 09:36PM ET
The U.S. newspaper publishing industry is no longer restricted to print. This is largely because rampant technological advancements and the steady adoption of the same have opened up multiple ways by which the industry can reach its target audience. The New York Times Company (NYSE:NYT) is fast acclimatizing to the changing face of the multiplatform media universe and has already included mobile and reader application products in portfolio.
Undoubtedly, 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. Now as readers have swarmed to the Internet, advertisers followed suit and so did newspaper companies.
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.
Let’s Do a Brief Introspection
The New York Times Company has been contemplating new avenues of revenue generation in a bid to counter the dwindling print advertising revenues. We noted that print advertising revenue fell 1.8% in the first quarter of 2018.
The New York Times Company has been realigning cost structure and streamlining operations to increase efficiencies. The company is concentrating on online activities, as evident from its pay-and-read model. It had also launched The New York Times Crossword app for Android users, whereby subscribers have access to the daily puzzle and the daily Mini puzzles.
The company recently declared that it has now more than 400,000 standalone subscribers to The New York Times Crossword. The company notified that the number of paid digital subscribers reached 2,783,000 at the end of the first quarter of 2018 — rising 139,000 sequentially and 25.5% year over year. Of the 139,000 subscriptions, 99,000 came from digital news products, while the balance came from Cooking and Crossword products.
Subscription revenue grew 7.5% during the first quarter, primarily due to increase in the number of subscriptions to the digital-only products. Revenue from digital-only subscriptions products surged 25.8%. Management now projects total subscription revenue in the second quarter of 2018 to increase in the mid-single digits.
Notably, this Zacks Rank #2 (Buy) stock has surged 30.3% in the past six months, outperforming the the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .
The New York Times Company Price, Consensus and EPS Surprise
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