New York Times May Finally Be On The Verge Of A Sustainable Future
The New York Times‘ (NYSE:NYT) struggle to reclaim its footing given the print-to-digital transformation may finally be looking up. The company’s stock price has climbed more than 20% following the U.S. presidential elections, and it has seen a more-than-tenfold increase in daily subscription sign-ups since the election, far surpassing any other news medium. In fact, on a number of individual days, more than 10,000 new subscribers have offered up their credit cards, which would be almost 20 times the rate of subscription sign-ups relative to a year ago. ((Behind the Times’ surge to 2.5 million subscribers, politico.com, Dec 2016))
NYT’s CEO Mark Thompson mentioned in the annual UBS Global Media Conference that the media company sold 2,00,000 new digital-only subscriptions since October, which could potentially add more than $30 million to NYT’s top-line. He also pointed out that international subscribers accounted for 13% of the total Times subscription base. [1]
U.S. President Elect Helps In Subscriber Growth
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U.S. President-elect Donald Trump has been highly critical of the New York Times and has attacked the newspaper several times on Twitter, calling it failing and criticizing its coverage of reported turmoil within his transition team. To add to that, lawsuits were also threatened against NYT to which the newspaper’s lawyers issued a scathing response. In light of these events, NYT gained subscribers driven by the publicity and controversy surrounding the President-elect. In fact, NYT added 41,000 paid subscriptions across its print and digital platforms in the first week after the presidential election, representing the largest subscription increase since it introduced its pay-wall in 2011.
Regardless of whether Trump’s criticism continues against NYT or not, the newspaper could still draw large audiences in the near term.
Growth In Fake News Adds To Subscription Numbers
Another factor working in favor of NYT’s subscription numbers is the increase in circulation of “fake news.” With consumers unsure about some news sources, many have turned to the Times, which a Pew research survey found to be one of the most trusted major news outlets in the country. [2] Going forward, this brand recognition and trust should provide NYT an opportunity to further grow its readership. [3]
In general, a higher digital subscriber base can help NYT stabilize its declining print circulation revenues. In Q3 2016, headwinds in print circulation and related advertising revenue more than offset the gains made in digital circulation, causing total revenues in the quarter to decline 1% year-over-year. However, we can expect NYT to post solid results in the fourth quarter, owing to the solid growth in paid subscriptions since the election. NYT expects this surge to continue into 2017 as well.
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Notes:- Newsonomics: The New York Times is setting its sights on 10 million digital subscribers, niemanlab.org, Dec 5 2016 [↩]
- Political Polarization & Media Habits, journalism.org, Oct 2014 [↩]
- Fake News Will Boost The New York Times, seekingalpha.com, 8 Dec 2016 [↩]