The New York Times added over 190,000 paying subscribers during the first quarter of 2023, but digital advertising revenue fell nearly 9% on a year-over-year basis, the company announced on Wednesday.
NYT has amassed over 9 million digital-only subscribers, but growth has slowed over the past year. It added 387,000 net new subscribers in the first quarter of 2022, and 240,000 in Q4 2022, by comparison.
Although subscriber growth is becoming more challenging, the publisher’s subscription business continues to prove more resilient than its advertising business as economic instability persists. Its total revenues grew 4.3% during the quarter to reach $560.7 million. Subscription revenues increased 6.9% to $397.5 million, while advertising revenues decreased 8.6% to $106.2 million in the same period.
“While advertising continues to experience near-term, cyclical challenges, our bundle strategy is gaining momentum, engagement metrics are strong, pricing initiatives are taking hold and we are slowing cost growth,” said Meredith Kopit Levien, the company’s president and chief executive officer. “Our strategy was purpose-built to give us multiple growth levers, and we are confident that we are on the path to becoming a larger and more profitable company.”
As we’ve documented previously, converting and retaining subscribers has become increasingly challenging for publishers across the board over the past two years as consumers and businesses pull back their spending and hunt for opportunities to cut down their expenses.
But despite these challenges, publishers continue to report that their subscription revenues are holding up well overall, and remain relatively well-insulated as other revenue lines such as advertising and commerce slow more significantly and/or become more costly and cumbersome to operate.
The majority of subscription-first publishers say they’ve seen no meaningful contraction of their subscriber bases or revenues over the past six months, and some credit the availability of recurring subscriber revenue for stabilizing their operations over the past year.
For most publishers, a blend of advertising and subscriptions continues to provide the optimal approach for maximizing revenue, driving sustainable growth, and meeting the needs and expectations of audiences. Publishers with solid reader revenue bases and the ability to monetize via advertising and other channels should be well-equipped to weather the current economic climate effectively and to capitalize if and when the advertising market rebounds.
For more information on how leading publishers are adjusting their subscription approaches to navigate economic uncertainty, see our recent report “Weathering the storm.”