NY Times (NYT) Strategies on Track, Ad Revenue a Concern

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The New York Times CompanyNYT has been contemplating new avenues of revenue generation in a bid to counter the dwindling advertising revenues. Analysts pointed out that increasing online readership has made the print-advertising model increasingly redundant. The company is fast acclimatizing to the changing face of the multiplatform media universe, and has already included mobile and reader application products in portfolio.

Other publishing companies such as New Media Investment Group Inc. NEWM , Gannett Co., Inc. GCI and The McClatchy Company MNI are also trying to adapt to different revenue generating ways. The company has been realigning cost structure and streamlining operations to increase efficiencies. It had offloaded assets that bear no direct relation with the core operations in order to concentrate on online activities.

Strategies Undertaken

Pay As You Read

The New York Times Company is concentrating on online activities, as evident from its pay-and-read model. Its pricing system for was launched on Mar 28, 2011. The company notified that the number of paid digital subscribers reached 2,333,000 at the end of the second quarter of 2017 - rising 114,000 sequentially (93,000 came from the digital news products and 21,000 from the Crossword product) and 63.4% year over year.

Digital advertising revenue surged 22.5% to $55.2 million, after witnessing an increase of 18.9% in the preceding quarter. Higher digital advertising revenues came on the back of rise in revenues from mobile platform, programmatic buying channels and branded content, partly offset by a fall in traditional website display advertising.

Focus on Other Verticals

The company is not only gearing up to become an optimum destination for news and information but is also now focusing on service journalism, with verticals like Cooking, Watching and Well. In this regard, it recently acquired The Wirecutter and its sister site, The Sweethome that recommends people about technology gear, home products and other consumer services. The company also acquired a digital marketing agency and portfolio company, HelloSociety, from Science Inc., which complements its T Brand Studio that helps in creating digital ad innovation and branded content. Further, it has launched digital subscriptions for NYT Cooking, its popular recipe site and app.

Bottom Line

The New York Times Company is diversifying business, adding new revenue streams, strengthening balance sheet and restructuring portfolio. It had offloaded assets in order to re-focus on its core newspapers and pay more attention to online activities. These helped the company to post fourth straight quarter of positive earnings surprise, when it reported second-quarter 2017 results.

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New York Times Company (The) (NYT): Free Stock Analysis Report

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McClatchy Company (The) (MNI): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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