The New York Times Company NYT is fast acclimatizing with the changing face of the multiplatform media universe and has already included mobile and reader application products in its 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. As readers started depending on the Internet for news, advertisers followed suit, and so did the newspaper companies.
Other publishing companies such as New Media Investment Group Inc. NEWM, Gannett Co., Inc. GCI and The McClatchy Company MNI are also trying to adapt to different ways of revenue generation.
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 10.2% in the fourth quarter of 2018.
The 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. 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.
The company notified that the number of paid digital subscribers reached 3,360,000 at the end of the fourth quarter of 2018 – rising 265,000 sequentially and 27.1% year over year. Subscription revenues grew 5%, excluding the impact of the additional week in 2017. Revenues from digital-only subscriptions products jumped 9.3%.
Management now projects total subscription revenues in first-quarter 2019 to increase in the low to mid-single digits, while digital-only subscription revenues are likely to rise in the mid-teens. The company targets 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., which 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 its portfolio. It offloaded assets in order to re-focus on its core newspapers and pay more attention to online activities. These helped the company to post the fifth straight quarter of top and bottom-line beat, when it reported fourth-quarter 2018 results.
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New Media Investment Group Inc. (NEWM) : Free Stock Analysis Report
McClatchy Company (The) (MNI) : Free Stock Analysis Report
Gannett Co., Inc. (GCI) : Free Stock Analysis Report
The New York Times Company (NYT) : Free Stock Analysis Report
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