The New York Times' overall revenue declined .6% in Q2 year over year to $388.7 million; its adjusted operating profit declined drastically from $70.7 million in Q2 2013 to 55.7 million in Q2 2014. Advertising revenues were down 4.1% to $156.3 million year over year, fulfilling a Q1 prediction by CFO James Follo that such revenues would decline. Much of this was driven by weakness in print advertising which decreased 6.6% year over year.
Digital advertising and circulation stemmed the losses somewhat. Digital advertising increased 3.4% to $41.5 million from $40.1 million, and currently accounts for over a quarter of all advertising revenue.
The New York Times added 32,000 digital subscribers in the quarter, 39% more than the growth at the same time last year, for a total of 831,000 subscribers. That includes e-reader subscriptions as well as new products like NYT Now, Times Premier and NYT Opinion.
Growing digital circulation further is an area of focus. “We know that long-term digital revenue growth depends on the reach and depth of engagement of our digital audience…[we] believe we can significantly grow our digital audience, which in turn will contribute to improved digital subscription and advertising monetization,” CEO Mark Thompson said in a statement.
Thompson is also “encouraged by the growing success of Paid Posts, our native advertising solution, which we launched in January." While still early, "we are pleased with current demand and numbers for reader engagement."
The Times did not address its strategies or outlook around programmatic, as it had done in previous calls.
Mobile was a hot topic, though the company does not break down subscriptions according to mobile or desktop. It does have 20 million mobile readers a month, only slightly less than the web's 30 million readers a month.
The NYT Now app, which features morning and evening news highlights, has attracted a markedly younger audience. It's sold at a lower price point, and has attracted a new class of users that the Times is still trying to figure out how to market to. An Android version of the app is a next step. There will also be a cooking-themed app aimed at a fall release.
Video is also growing strongly, and is on track to double by the end of the year, Thompson said.
The company is also implementing the results of its Innovation Report, the contents of which were leaked in early May. In the report, The New York Times graphed its results next to that of disruptive upstarts like BuzzFeed, Politico, and The Huffington Post. BuzzFeed recently surpassed the Times in traffic. The report emphasized a focus on audience development as well as leveraging the huge archive of Times stories to repackage content and create interactive sections that function as evergreen content.
Looking ahead, increasing engagement across all devices is the company's plan to grow circulation and the accompanying advertising revenue. "We know we have more to do in fundamental audience development, and seizing the opportunities of mobile," Thompson said.
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