What’s The News167 years old American newspaper, The New York Times have announced their Q4, 2018 earnings, and there are a lot of green fields in the balance sheet. Click To Tweet
They reported total revenues of $709 million during FY 2018, and this is indeed an achievement. This surge in revenues primarily resulted from a 17.7% increase in the revenues from digital subscription.
From a purely financial viewpoint, the New York Times is well into its way to achieving 10 million Digital subscribers by 2025, and $800 million in revenues from Digital operations, by 2020.
What Does This Mean?
Digital-based publications which heavily relied on revenue-per-click business strategy have been going through rough weather lately, as we got reports of terminations and firings from all around the globe.
Buzzfeed, the iconic digital publication has announced that they will fire 15% of the employees in order to stop losses, and increase profits. Vice Media will fire 250 odd employees, so will AOL, Yahoo, and HuffPost.
However, in such times, when Digital publications are struggling to figure out the right business model, a 167-year old traditional newspaper has set new benchmarks in the business of digital publication, and this changes everything.
Mark Thompson president and CEO, The New York Times Company said,
“NYT appeal to its subscribers and to the world’s leading advertisers – depends more than anything on the quality of our journalism. That is why we have increased, rather than cut back, our investment in our newsroom and opinion departments. In 2019, we will accelerate our digital growth further with fresh investments into journalism, product, and marketing.”
Why Does It Matter?
The Bigger Picture: In 2016, the New York Times too was in the middle of a turmoil. Their digital revenues were falling, and investors were questioning the very logic behind their digital presence.
Orthodox voices inside The New York Times were putting pressure to concentrate only on print media, which has been their core product since the last 167 years.
But their focus on good journalism, and their flexibility to adapt the new untested waters of digital subscription paid off. In the last quarter, when they increased their digital revenues and digital subscribers, they lost on print ad revenues and print subscription revenues: both went down by 6.5% and 3.4% respectively.
This clearly proves that The New York Times has cracked the code for running a successful, and profitable digital publication business and they are thriving in it right now.
Jeff Bezos owned Washington Post as well reported an increase in revenues this year, based on higher digital subscribers.
Is “digital subscription” the Holy Grail of Digital Publication business right now? Or the success of The New York Times and Washington Post is more due to the legacy attached with them, rather than a business model per se?