Digital revenue rose 17% in Q3 at The New York Times. During the same time period, digital subscriptions rose 20%.
But overall revenue rose just 1% for the quarter — anemic growth, though The New York Times spun it as good news, since digital increases almost offset declines in print. (earnings release)
“Smartphone, tablet, and video, taken together, are now a significant reason why we turned what was a revenue stream that was in slight decline that is now a revenue stream growing healthily,” said Times CEO Mark Thompson.
The gap between consumer usage on mobile and ads on mobile remains. Only 10% of digital revenue comes from mobile. In the past year, though, mobile increased from one-third of user sessions to over half of user sessions, said EVP of advertising Meredith Kopit Levien.
The Times mentioned ways it’s working to close that gap.
Paid Posts, which launched in January and attracted 30 clients so far, “was meant for the mobile world,” Levien said.
The Times launched mobile ad units, and is still experimenting with frequency and type of creative to find what works best on mobile. The publisher created a “full-screen, self-propelled, tappable story” designed to be viewed and monetized in the mobile market.
“Mobile is still small for us. We’re eager to put innovative product in the marketplace to move [that gap] closer together,” Levein said.
Levein said the company has made advances in the programmatic space, though she noted it’s still a small part of The Times’ business.
“We’re taking a lot of positive steps in the programmatic space,” Levin said. “We’ve done quite a bit of work this year in our technology stack and opening up demand pools for buying and selling, and expect it to be a more meaningful part of business in the coming year.”
The 20% growth in subscriptions amounted to 44,000 net new subscribers. The Times highlighted the traction it has seen with its mobile subscription and content offerings.
Mobile apps like NYT Now offer Times content at a lower price point. “We are excited with the chord we’ve struck with younger users with that particular app,” Thompson said. The Cooking app attracted two million uniques last month. But the Times chose to sunset the Opinion app due to its small following.
Understanding its subscribers across devices and print remains a challenge. “We don’t have a sophisticated multiplatform metric or master metric,” Thompson said. The company tracks engagement by session time “from platform to platform,” but can’t tie together usage.
This quarter included costs related to severance and reorganization. Earlier this week, The Times announced the departure of Denise Warren, the EVP of digital products. Her job will become two as the Times splits up its products and services division. The Times will hire its first ever Chief Marketing Officer to take care of marketing, and a Chief Digital Officer to head up more product-based digital efforts.
For next quarter, The Times predicted its digital growth and subscriptions would continue to increase, but not to the levels seen in Q3. “We don’t expect every quarter to grow as strongly as this one,” Thompson said. Wall Street seemed to disagree with the strength of the quarter. The stock has slid 6% so far from the previous close.
