New York (CNN Business)The New York Times (NYT) reported a record rise in digital subscriptions, but advertising revenue fell by double digits again for the first quarter of 2020.
The Times reported on Wednesday that it added 587,000 digital subscriptions, the highest number of new subscriptions in a quarter in its history. Of that total, 468,000 went to its core news product.
By the end of the quarter, much of the US had gone on lockdown because of social distancing measures prompted by the coronavirus with consumers turning to news sites and television in record numbers for updates on the crisis. The Times allowed readers to consume its coronavirus content outside of the paywall, which created a spike in traffic.
“While we don’t expect this striking surge in traffic to continue indefinitely — we’ve already seen anonymous traffic go down — we’re encouraged by the registered users because of deliberate work on stimulating return,” COO Meredith Kopit Levien said on Wednesday’s earnings call.
Despite relaxing the paywall, the Times ended the quarter with a high of about 5.8 million total subscriptions across digital and print. By the end of April, the New York Times surpassed six million subscriptions. The company set a goal in 2019 to reach 10 million subscriptions by 2025.
The Times’ total revenue increased by 1% to $443.6 million from $439.1 million the year prior. Its subscription revenues were up 5.4% whereas its ad revenues decreased 15.2%. Digital ad revenue decreased 7.9% while print ad revenue dropped by 20.9%.
The Times said in a March 2 regulatory filing that it expected total ad revenue to decline in the mid-teens and digital ad revenue to decline 10%. CEO and President Mark Thompson said the “slowdown” in advertising bookings was due to “uncertainty and anxiety about the virus.”
Over past two months, many media companies have been forced to cut costs through layoffs, furloughs and pay cuts as the pandemic slashed revenue sources. The Times, however, has not been as hard hit as other media companies since it relies more on subscription revenue than ad dollars.
“The Times’s business model, with its growing focus on digital subscription growth and diminishing reliance on advertising, is very well positioned to ride out this storm and thrive in a post-pandemic world,” Thompson said in a statement on Wednesday.
Thompson said on the earnings call that he expects the company’s headcount to increase this year.
The Times’ operating profit in the first quarter of 2020 decreased to $27.3 million from $34.6 million the year prior. Its net income was $32.8 million, up from $30.2 million.
Thompson said the company predicts ad revenue in the second quarter of 2020 “will fall between 50% and 55% compared to a year ago with limited visibility beyond that.”
The Times is the one of first publicly traded media companies to report earnings during the pandemic. Gannett (GCI), the largest US newspaper owner, reports earnings on Thursday.
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