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The New York Times Tops 5 Million Subscriptions as Ads Decline
The company hit a milestone in the fourth quarter, passing $800 million in annual digital revenue, an amount that came more from readers than advertisers.
In the last three months of 2019, The New York Times Company reached one major business goal and got more than halfway toward another. Both are related to what has become the company’s main business: making money directly from customers who pay to do the crossword, check out recipes and follow the news on their computers, tablets and phones.
As the company disclosed last month, in 2019 it passed $800 million in annual digital revenue for the first time, an objective it had pledged to meet by the end of 2020. Most of that $800.8 million — more than $420 million — came from news subscribers.
In the fourth-quarter earnings report that came out on Thursday, the company said its total subscription figure was over five million, a high. The company’s stated goal is to reach 10 million by 2025.
The 5,251,000 total subscriptions include customers who receive ink-and-paper editions on their doorsteps and driveways and the close to 3.5 million who are digital-only customers for the core news product, the company said. With impeachment proceedings underway and the 2020 presidential campaign heating up in the quarter, digital-only news subscriptions grew by 30 percent in the last three months of 2019 compared with the year before. The other Times subscribers are the nearly one million who pay for the Cooking and Crossword apps.
The company added more than one million net digital subscriptions last year — the most new subscriptions annually in the newspaper’s history.
The price of its shares rose nearly 13 percent in trading on Thursday, closing at $38.55.
In a statement, Mark Thompson, the Times Company president and chief executive, called 2019 “a record-setting year for The New York Times’s digital subscription business, the best since the company launched digital subscriptions almost nine years ago.”
Advertising was a weak spot, with print and digital ad revenue each declining slightly more than 10 percent from the previous year’s final quarter. The company attributed the drop in digital ad revenue to an unusually strong finish to 2018.
The company said it expected to continue generating revenue more from readers than from the advertisers that were once integral to the newspaper business. Not unrelated: The price of subscriptions is going up.
Starting this week, the price of a digital-only subscription to the main news product every four weeks will increase to $17, from $15, the company said. It is the first increase in the digital subscription price since The Times decided to charge readers for online content in 2011.
“We believe that our loyal subscribers know that their financial contribution plays an essential role in maintaining the quality, breadth and depth of the report they value so much,” Mr. Thompson said in the statement.
In its forecast for the first quarter of 2020, the company said it expected recent trends to continue. That means a steady rise in overall and digital-only subscriptions amid a 10 percent decline in advertising revenue.
The company also said it expected operating costs to go up, owing to its “continued investment in the drivers of digital subscription growth.” In the fourth quarter, costs rose because of “growth in the number of newsroom employees” and “digital product development employees,” the company said.
Operating profit in the fourth quarter increased 4.4 percent from a year earlier, to $78 million. Revenue was up 1.1 percent, to $508.4 million.
The company also announced on Thursday that its board of directors had voted to increase the per-share dividend, the quarterly payment it makes to anyone who owns a share of Times stock, by a penny, to 6 cents.
The current payout of a nickel a share costs the company $33 million a year.
The Crossword and the Cooking apps continued to bring in customers who may want little to do with the news. The cooking product attracted 68,000 new subscriptions in the final quarter of last year.
Under a reorganization announced last month, the two apps, along with the NYT Parenting site, will be grouped with The Wirecutter, the product recommendation site acquired by the Times Company in 2016, and led by David Perpich.
Edmund Lee contributed reporting.
An earlier version of this article incorrectly stated the revenue for the fourth quarter. It was $508.4 million, not $502.7 million.
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Marc Tracy has covered print and digital media for The New York Times since 2019. Previously he covered college sports for The Times. More about Marc Tracy
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