In this morning’s first quarter earnings call, which had revenues down 2 percent, The New York Times Co. announced plans for a number of new initiatives at the flagship paper, including a lower-priced subscription model, international expansion, and increased focus on digital video, all expected to roll out in the last quarter of 2013 through 2014.
“We mean to grow our business by launching new products and services based on the unique strengths of Times journalism and by investing in the rapid expansion of existing operations—video and live events are examples—where we’re already seeing strong growth,” CEO Mark Thompson said on the earnings call.
Following reports from earlier this year that the newspaper was planning to test a cheaper, “entry-level product”—initially thought to be an “NYT Junior” edition aimed at college students—the Times confirmed that it would roll out “a lower-priced paid product designed to allow access to The Times’s most important and interesting stories in a convenient, media-rich package,” as well as several other economy options that would provide access to specific newspaper sections. Thompson didn’t provide pricing details, but at a conference last week, Paul Smurl, vp of NYTimes.com paid products, said that a cheaper digital product could start at $10 or less. (The current all-access plan is priced at $35 for four weeks.)
There will also be an “enhanced tier” (read: more expensive) option, which would give current all-access subscribers “access to Times events and the ability to gift subscriptions and provide full family access, among other incentives” for an added fee.
The Times has already announced plans to rebrand the International Herald Tribune as the International New York Times by the end of the year, as part of an effort to created a unified brand and grow international revenue. Today, the Times also said that it would invest in international marketing and in pricing and payment methods to localize the purchase process.
Another area of growth will be brand extensions, with a focus on games, e-commerce and live conferences, Thompson said this morning. The Times will also continue to push digital video “to satisfy the demands of both users and advertisers.” Earlier this week, the newspaper said that it was planning to drop the paywall for all video content on its website in order to boost viewership.
The growth plans come amid disappointing financial results for the company. First-quarter net income dropped 93 percent year over year to $3.1 million in the face of declining print and digital ad revenue. (The Times' income was boosted by the sale of its shares in Fenway Sports Group during the first quarter of 2012.) Total revenue declined 2 percent to $465.9 million, while print and digital advertising revenues decreased 13.3 percent and 4 percent, respectively. (According to eMarketer, overall U.S. ad spending on newspapers is expected to decline another 4.2 percent in 2013.)
Circulation revenue was a bright spot, increasing 6.5 percent, which Thompson attributed to strong digital subscription initiatives. The company had about 708,000 paid digital subscribers by the end of the first quarter, an increase of more than 45 percent versus the year-ago period. Operating profit was also up, from $12.6 million in the first quarter of 2012 to $22.9 million in 2013.