The company’s shares rose nearly 7% on Wednesday after releasing their first quarter results.
Many advertising-based companies have warned of a significant impact in the second quarter due to declining demand from advertisers. Many online publishers in the United States have said that advertisers are canceling or suspending ad campaigns because the coronavirus pandemic and lockdown are having an impact on advertisers.
This has resulted in massive layoffs and cost reductions in the media world, even as media consumption is skyrocketing.
The Times said it added 587,000 new net digital subscriptions compared to the end of the fourth quarter of 2019, the largest number of net subscriptions in a quarter in its history, despite easing its pay wall on the coronavirus coverage. The company’s subscription revenues increased 5.4% in the first quarter to $ 285.4 million year-on-year. In late April, the Times had more than 6 million total digital and print subscriptions, the statement said.
But that happened when advertising started to drop at the end of the quarter. Advertising revenue in the first quarter decreased 15.2% to $ 106.1 million year-over-year. The company’s digital advertising revenues in the first quarter decreased 7.9%, while print advertising decreased 20.9% as the pandemic had an additional impact on advertisers in the luxury, media, entertainment and financial categories.
And it is expected to slow further: the company said it expects second-quarter advertising to fall between 50 and 55 percent from a year ago “with limited visibility beyond.”
The company said it expects second-quarter subscription revenues to increase in mid to high numbers compared to the second quarter of 2019. In a statement, the company said it is putting more in addition the emphasis on the growth of digital subscriptions and on addiction to advertising. is well positioned to withstand the effects of the pandemic and beyond. CEO Mark Thompson said on CNBC’s The Exchange on Wednesday that while advertising is a major source of revenue, it represents less than a quarter of its economy.
“We have these very strong growing revenues, especially from digital subscriptions and the reason the market has largely welcomed our results today is because they can see that the engine of strategic growth is also working very well,” a said Thompson on CNBC.
He said that the circumstances of the moment brought a large swath of new audiences to the media company. Readers first flocked to the site for more details on the blockages and are now showing immense interest in recipes and food coverage, crossword puzzles and games and its Wirecutter site as consumers shop at House.
“What’s interesting is both the millions of new registered users we receive and the hundreds of thousands of new subscribers, far more than ever before. What is so interesting is that these are certainly younger, certainly ethnically diverse, more of the geographically widespread people we have seen, so one of the things we are seeing is a real enlargement, not only of the total Times audience… but the audience engaged is a wider audience. It’s a much more diverse and younger audience than we’ve seen before. “
In a call for results, Thompson said the drop in advertising revenue would put profitability over a period of time and that the company was planning cost reductions, including job cuts. He said the company does not expect any of these job cuts in journalism.
On the call, the company’s chief operating officer, Meredith Levien, said that the company expects a pronounced downturn in advertising for at least the next quarter “and possibly beyond.” But she noted that the company had worked to transform its advertising business and that current circumstances would accelerate this. The company is working to focus its advertising activities in a smaller number of growing categories, such as technology or financial services, where the NYT can establish cross-platform collaborations with companies like Google or Verizon Alphabet.
He also works on advertising products based on proprietary data collected from his readers. And while the company expects audio demand to slow during a recession, it said podcast revenues in the first quarter increased 30% as the podcast “The Daily” became “a platform” an even bigger and more sought-after form for our advertisers. ”
CNBC’s Kevin Stankiewicz contributed to this report.