In Q2, NYT's revenue grew 6% year-over-year (y-o-y) to $590.9 million as the company wrestled with the industry-wide slowdown in digital advertising. That figure came as subscriptions continued to make up for advertising in the revenue stream. To break down the revenue gains further, advertising revenue remained flat y-o-y to $117.8M, but subscription revenues rose 17% to $409.6M. Other revenue landed at $63.5M, up 16% y-o-y. The media company reported approximately 9.88 million subscribers across its print and digital products, including approximately 9.19 million digital-only subscribers. The company continues to be on track for its target of at least 15 million total subscribers by the end of 2027.
Note: NYT's FY'22 ended on December 31, 2022. Q2 2023 refers to the quarter that ended June 30, 2023
For Q3, NYT sees digital-only subscription revenue rising to about 14% to 17% y-o-y, and total subscription revenue up 8% to 10%. The digital ad revenues are expected to increase mid-single-digit and the larger total ad revenues are expected to remain flat. Other revenues are expected to increase by 13% to 16% y-o-y.
As of now, the media company continues to grow its subscriber base of digital-only subscribers, but this growth is largely a result of discounted offers. In response to escalating costs and a fear of losing subscribers, the company has also not been able to raise its subscription prices. It is for these reasons NYT acquired the sports news website The Athletic - its largest acquisition to date of $550 million. The Times also bought the popular word game Wordle, which was a much smaller deal, yet more evidence that the company is seeking out external growth sources.
The New York Times Co. (NYT) is a media company primarily in the newspaper business. Currently, the company makes money through advertising in its print newspapers, online advertising, and newspaper circulation fees. In 2011, the company launched its paid subscription service for NYTimes.com, which added an additional revenue stream of digital circulation. The company's digital-only subscription products include News products, as well as its Crossword and Cooking products.
Online media provides more abundantly available information, at a faster rate and at cheaper prices when compared to print media. This has effectively rendered print newspapers obsolete, and online reading is made further easy by tablets/smartphones, both physical circulation and print advertising within newspapers should see a decline going forward.
Social networking leader Facebook has initiated a unique concept of "frictionless sharing" through their Open Graph tools, which enables publishers to instantly get their articles/content shared across a user's network of friends. Various media companies like Yahoo! and Washington Post have adopted the Open Graph to increase user engagement. We expect more websites to join the bandwagon if they increase both web traffic and user engagement. Additionally, the growing penetration and bandwidth capabilities of smartphones and tablets would play a major role in increasing traffic and viewership for media companies. NYT has also made headway in this segment by releasing smartphone and tablet-specific apps.
The price of the digital-only subscription to the main news product every four weeks increased to $17, from $15, the company mentioned during the Q1 2020 report. It was the first increase in the digital subscription price since The Times decided to charge readers for online content in 2011.
NYT's digital products devoted to the Cooking and Games segments have hit 1 million subscriptions each. That milestone was nearby when the company reported its Q3 2021 earnings. The Games offering started with the newspaper's Daily Crossword and introduced the Mini in 2014, followed by a number of popular games. The Cooking segment was also launched in 2014.
