VALUATION HIGHLIGHTS

1. Subscription constitutes 64% of the Trefis price estimate for New York Times's stock.
2. Other Revenue constitutes 20% of the Trefis price estimate for New York Times's stock.
3. Advertising constitutes 16% of the Trefis price estimate for New York Times's stock.

WHAT HAS CHANGED?

NYT Tops Estimates in Q2

In Q2, NYT's revenue grew 6% year-over-year (y-o-y) to $625 million. To break down the revenue gains further, advertising revenue was up marginally to $119M, but subscription revenues rose 7% to $439M. Digital advertising revenue increased by 8%, while print advertising fell by 10% in the quarter. The Times now has more than 10.8 million total subscribers, of which 10.2 million are digital-only. The company has said it has a goal of 15 million subscribers by the end of 2027. A growing number of digital subscribers — now nearly half — subscribe to more than one of The Times’s products, which include the news report, games, recipes, the Wirecutter review site, and The Athletic, a sports news website.

Note: NYT's FY'23 ended on December 31, 2023. Q2 2024 refers to the quarter that ended June 30, 2024

Athletic Continues To Lose Money

The Athletic, which the company acquired for $550 million in 2022, continues to lose money. But the losses shrank to $2.4 million in Q2, from $7.8 million during the same period last year. Revenue at the website grew to $40.5 million, up 33% y-o-y, because of a jump in the number of subscribers as well as an increase in revenue from display advertising.

The Athletic now has 5.3 million digital-only subscribers, which includes those who have a stand-alone subscription to the site and those who have access to it through a Times subscription bundle. That’s up from 3.6 million the same time last year.

BUSINESS SUMMARY

The New York Times Co. (NYT) is a media company primarily in the newspaper business. Currently, the company makes money through print newspapers, online advertising, and newspaper circulation fees. In 2011, the company launched its paid subscription service for NYTimes.com, adding a digital circulation revenue stream. A growing number of digital subscribers - subscribe to more than one of The Times’s products, which include the news report, games, recipes, the Wirecutter review site, and The Athletic, a sports news website.

KEY TRENDS

Digital content increasingly gaining relevance

Online media provides more abundantly available information, at a faster rate and at cheaper prices when compared to print media. This has effectively rendered print newspapers obsolete, and online reading is made further easier by tablets/smartphones, both physical circulation and print advertising within newspapers should see a decline going forward.

Social and Mobile to drive future growth

Social networking leader Facebook has initiated a unique concept of "frictionless sharing" through their Open Graph tools, which enables publishers to instantly get their articles/content shared across a user's network of friends. Various media companies like Yahoo! and Washington Post have adopted the Open Graph to increase user engagement. We expect more websites to join the bandwagon if they increase both web traffic and user engagement. Additionally, the growing penetration and bandwidth capabilities of smartphones and tablets would play a major role in increasing traffic and viewership for media companies. NYT has also made headway in this segment by releasing smartphone and tablet-specific apps.

Last Price Hike For Digital Subscription Service in 2020

The price of the digital-only subscription to the main news product every four weeks increased to $17, from $15, the company mentioned during the Q1 2020 report. It was the first increase in the digital subscription price since The Times decided to charge readers for online content in 2011.