The New York Times’ digital business grew both in subscriptions and ad revenue in Q2. Digital revenue grew 14% to $48.3 million because of “mobile, paid posts and programmatic,” CEO Mark Thompson said.
Digital subscriptions grew 19% to 990,000 and, by the time of the earnings call, had passed 1 million subscribers.
Growing the scale of the digital audience will be key to making the Times’ digital business profitable. That audience still counts for just a third of its overall business, with lower margins than the declining print business.
Three partnerships announced in the past quarter – with Apple, Facebook and Starbucks – try to bring Times content in front of new potential subscribers on mobile devices. That means giving away a limited amount of content for free in hopes of turning some of those readers into subscribers.
“We’re making a deliberate choice to do more work at the top of the funnel, and what we’re doing with Facebook, Starbucks and Apple are all part of that,” said CRO Meredith Kopit Levien.
Participating in Facebook Instant Articles, which loads articles in Facebook’s mobile app, is a “deliberate and important experiment for us,” Kopit Levien said. The Times wants to expose new readers to its content as well as understand where such readers fit into the Times’ subscription funnel.
The Times will also make select articles free to people using Starbucks’ app, and it announced it will be part of Apple’s News app, which brings together articles from different media outlets.
After limited traction gaining subscribers to its low-cost NYT Now app, aimed at younger readers, it made the app free.
Exposing content to nonpaying audiences was one reason Times’ traffic grew 27% year over year, to 60 million monthly users.
Mobile revenue grew to 15% of digital revenue, up from 10% in the first quarter of this year. Earlier this week, the Times launched Mobile Moments, which will use insights about how people consume content on mobile to inform ad experiences. “We are hugely focused on mobile right now,” Kopit Levien said.
Paid Posts, the company’s native advertising offering, are also produced with mobile in mind. “If you look at our most recent Paid Posts, most of them have video in them, and they’re all optimized for a mobile experience,” Kopit Levien said.
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Thompson warned that growth in digital advertising will slow in the second half of the year, in part because the Times faces strong year-over-year comparisons.
But it’s also going to take a hit from the industry’s embrace of the viewability standard. “We expect viewability to have some impact in the near term on revenue,” Kopit Levein said.
