The New York Times just had a quarter reminiscent of the days before the Great Newspaper Crash.
The Times paywall hit 799,000 subscribers, for one. More importantly, the paper grew ad revenue by 3.4 percent in the first quarter, an increase led, shockingly enough, by print, which was up 3.7 percent from a year ago.
But, as Reuters’s Jennifer Saba points out, temper your excitement. The Times Company expects ads to resume falling again next quarter in the “mid-single digits.” Cue the sad trombone.
And operating costs grew faster than revenue in the quarter, which means profit was down. The paper’s costs rose 3.8 percent on “higher compensation and benefits expenses associated with the strategic growth initiatives as well as higher retirement costs.”
We’ll hear a little later on the conference call about just what happened in the first quarter, but we’ve been noticing for six months now that print ads were creeping surprisingly close to even.
And digital ads, which have been disturbingly bad for two years now, finally crept into positive territory again, ending up 2.2 percent in the quarter.
Times CEO Mark Thompson said in the press release that, “Paid Posts, our native advertising initiative, launched very successfully during the quarter. However, we are certainly not claiming victory in advertising yet; we expect continued month-to-month volatility and recognize that we will face some significantly tougher year-on-year comparisons as the year goes on.” Good call.
The Times really needs digital ad growth to get back up to mid-to-high single digits in the medium term to really solidify its eventual transition to an all-digital future.
On the paywall front, the Times added 39,000 digital subscriptions in the quarter, which is solid, particularly when you recall the talk a year ago about how it had hit a wall. Total digital subscribers were up 18 percent from a year ago:
Digital subscription revenue, which reached $40.3 million, was up less at 14 percent. That’s a change from 2013, when digital-sub revenue grew much faster than the subscription count.
All that adds up to total revenue growth of 2.6 percent in the first quarter, the best result in years.
And while the Times incurred the expense of its expanded paywall offerings, which includes the cheaper NYT Now and the more expensive Premiere, it didn’t get any revenue yet. Those products launched in the current quarter.
Don’t expect those to make a huge difference to the bottom line, but we’ll have to wait until July to find out how big it might be. For now, Thompson says in the release that “Our new mobile product, NYT Now, in particular is being embraced by the market.”
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.