Aided by the recent addition of the sports website The Athletic, The New York Times Company said on Wednesday that it had added 387,000 net digital subscribers in the first quarter.
The company now has 9.1 million subscribers, it said, when including those from The Athletic, which the Times Company bought on Feb. 1.
While the jump gets The Times closer to its stated goal of 15 million subscribers by the end of 2027, The Athletic is eating into the company’s profits. The website, which The Times bought for $550 million in cash, lost $6.8 million over February and March.
Overall, the company reported adjusted operating profit of $60.9 million for the quarter, a decrease from $68.1 million a year earlier, hurt by The Athletic’s operating losses.
The growth in subscriptions as well as advertising helped push total revenue up 13.6 percent to $537.4 million. While total advertising revenue was up almost 20 percent, digital advertising revenue for the quarter increased 12.6 percent, lower than the company’s forecasts.
Total operating costs rose nearly 18 percent to $496.4 million.
“We’re off to a strong start on the next phase of our strategy, which is to become the essential subscription for every English-speaking person seeking to understand and engage with the world,” Meredith Kopit Levien, the president and chief executive of the Times Company, said in a statement.
Ms. Levien previously said Times executives believed that market was “at least 135 million” potential subscribers.
In February, The Times announced that it had reached its existing goal of 10 million subscriptions and set the new target of at least 15 million subscribers.
At the end of 2021, the company said it had about 7.6 million subscribers with 8.8 million subscriptions. The Athletic acquisition this year brought with it about 1.1 million subscribers. The company said the Athletic added about 16,000 net subscribers in the two months since its acquisition.
Ms. Levien described the subscription growth as the best first-quarter results besides the first quarter of 2020, which was driven by widespread interest in news of the coronavirus pandemic.
The company made a distinction between subscribers and subscriptions — a subscriber may have more than one subscription — in its earnings report for the first time on Wednesday. It reflects the company’s strategy to sell people bundles of subscriptions that give them access to news as well as lifestyle products, like Cooking and Wirecutter, a review and recommendation site.
That strategy was on display with the company’s acquisitions of The Athletic and, in January, Wordle, a game that gives players six chances to figure out a five-letter word.
Ms. Levien said Wordle had attracted tens of millions of new users to the Times Company, “many of whom stayed to play other games, which drove our best quarter ever for net subscriber additions to Games.”
For the current quarter, the company expects digital-only subscription revenue to increase 23 to 27 percent from a year ago, while digital advertising revenue is forecast to increase in the “low single digits.”
Adjusted operating costs for The New York Times Group, which does not include The Athletic, are expected to increase 12 to 15 percent in the quarter and then slow in the second half of the year, the company said. The Athletic’s estimated operating losses last year were $55 million on $65 million in revenue, and The Times said it expected a slight improvement in those losses in 2022.
Source: | This article originally belongs to Nytimes.com
