The New York Times added 210,000 digital subscribers in the first quarter of 2024, marking a 13% increase in digital subscription revenues vs. the same frame last year to $293 million. The increase was driven largely by bundle and multiproduct subscriber additions, the company said as it announced earnings on Wednesday. Digital ad revenues also increased 2.9% to $63 million, buoyed by higher display advertising revenues at The Athletic.
Here are the key figures:
Revenue: $594 million, a 5.9% increase from the same quarter 2023.
Earnings: Diluted earnings per share is $0.24.
Subscribers: The New York Times added 210,000 digital subscribers in the quarter to bring the total digital subscribers to 9.9 million.
Meredith Kopit Levien, president and chief executive officer, The New York Times Company, said, “2024 is off to a strong start, as our results reflect the power of our strategy to be the essential subscription for every curious person seeking to understand and engage with the world, and as our world-class news and lifestyle products continue to attract huge and deeply engaged audiences. Our first quarter financial performance illustrates that our news-based, multi-product, multi-revenue subscription strategy continues to work as designed, and is on track to drive continued growth in revenue and earnings as well as generate healthy free cash flow in 2024.”
At the end of the quarter, The New York Times said it had around 10.5 million subscribers for both print and digital combined, an 8% increase from 2023. The company has repeatedly stated that they intend to reach 15 million total subscribers by the end of 2027.
However, the Times’s advertising revenue suffered declines, with overall ad revenue decreasing 2.4% year-over-year to $103.7 million. The declines were attributed to lower print advertising and lower spending on media companies. On the other hand, digital advertising did increase 2.9% year-over-year to $63 million, attributed to higher ad revenue at The Athletic.
The Athletic, which was acquired by the Times in 2022 for $550 million, had 4.99 million subscribers at the close of the first quarter of 2024. But The Athletic had a net loss of $8.7 million in the first quarter, compared to $11.3 in 2023.
The Athletic’s, revenue grew 33% to $37.2 million, attributed to growing subscriptions and a licensing deal with Apple.
Games and puzzles – including Wordle and Connections – have played an important part in The Times’ subscription revenue and audience engagement, Kopit Levien said.
“Our growth here means we have lots of opportunities to deliver more value to more people. As one example, we’re unlocking the ability for subscribers to play the full archive of a thousand plus portal puzzles,” she stated. “Given the very strong engagement with games and our focus on continuing to add product value, we expect to be able to increase monetization over time.
“We have invested into a product people really love and we know that they love it because they’re deeply engaged. And I would just say broadly that engagement gives us monetization power over time, both in subs and in ads in subs.”
Kopit Levien said the games funnel is “a very effective entry point” for new consumers who register and may go on to buy a bundled subscription, and, “we have potential to use that harness, that direct paying relationship to introduce them to other things.”
She said they was a lot of excitement within the company around advertising on the games platform, because of the variety of formats available, plus the recently redesigned games app was one of the places they would be focused on in the back half of the year.
The New York Times filed an ambitious lawsuit in December against Microsoft and OpenAI, accusing the tech giants of copyright infringement. The suit argues that the generative A.I. tools that Microsoft and OpenAI have created rely on large language models, or LLM, “that were built by copying and using millions of The Times’s copyrighted news articles, in-depth investigations, opinion pieces, reviews, how-to guides and more.”
The Times’ lawsuit marked the first blockbuster case from news publishers over generative AI capabilities and how chatbots were trained, as the technology begins to embed itself in the media industry.
In the first quarter of 2024, the Times said it spent $1 million on the OpenAI and Microsoft lawsuit. Both Microsoft and OpenAI have sought to dismiss key elements of the lawsuit.
