Online subscriptions triple profits of 'New York Times'
Published 08/02/2013 | 04:00
'The New York Times' has said profits tripled in the fourth quarter of 2012 because more people are paying for its digital newspapers.
The earnings results marked the public debut of Mark Thompson as the Times' chief executive to Wall Street.
On his first call with analysts, Mr Thompson highlighted the firm's progress on the digital front and how circulation revenue surpassed advertising revenue for the first time in 2012.
"I took this job not just because I have been a devoted user of 'The New York Times' for many years, but because I believe it is one of a handful of global news brands which cannot just survive but can thrive in this digital era," he said.
Indeed, the company, which also publishes 'The Boston Globe', is reaping the benefits of charging readers for full access to its digital newspapers, a programme it introduced almost two years ago.
Analyst Edward Atorino called the circulation revenue "phenomenal".
"It looks better than I thought," he said about the overall results.
Circulation revenue rose 16.1pc to $257.8m (€192.4m) mainly because of growth in digital subscriptions. Paid digital subscribers to the Times and 'The International Herald Tribune', which it also owns, totaled 640,000 at the end of the fourth quarter, an increase of 13pc from the third period.
"What is notable is for the first time circulation revenue did exceed that of advertising revenue which helps allay my concern that print media will drag down 'The New York Times'," said Morningstar analyst Joscelyn MacKay.
However, the Times has been promoting its digital subscriptions heavily and Ms MacKay wonders how long it can keep circulation revenue up. "I'm still skeptical on the sustainability of that number," she said.
Amid the good news, however, there were some troubling signs. Revenue rose because of an extra week in the quarter. Even factoring that in, advertising revenue in the fourth quarter was still down 3pc to $279.9m. Stripping out the additional week, ad revenue tumbled 8.3pc on declines in both print and digital. (Reuters)