On Aug 7, the New York Times reported it had reached a record high in the number of paid subscriptions—digital and print—with 4.7 million people paying for the publisher’s products.
The company added a net total of 197,000 customers for its online products during the quarter, a sharp increase from the 109,000 subscriptions added in the same period in 2018. New York Times Co. also reported a second-quarter revenue growth of 5.2% compared with the same quarter last year.
On the same day they shared all this good news, the New York Times stock fell sharply, plunging by as much as 20%, and it has not strayed from that range since then.
Reason? The publisher said it expects digital advertising revenue to decline by high-single digits in the current quarter. Digital-subscription growth also slowed 12% from the first quarter.
Digital is the bedrock on which the company’s recent successes are built. The Times’ impressive digital strategy has seen paperless subscription revenue grow and countermand, to some extent, declining print subscriptions.
Any weakness in digital, combined with a decline in operating profit, happens to be a cause for concern. Although the company’s chief executive said the dip in profit was “in large part a result of continued investment into growing our subscription business.”
We expect the second half of 2019 to be somewhat more challenging for digital advertising.Mark Thompson, CEO of The New York Times Company
Not just in digital advertising, the company is hitting some bumps on social media too. NewsWhip, which tracks how billions of people engage with stories across all social networks, recently reported that the New York Times fell out of the top three in rankings of the top publishers on Facebook, pushed down by The Daily Mail.
The New York Times also did not feature in the top web articles on Facebook, in the same study.
In it’s latest report (the charts for which are not currently available), NewsWhip further states that The Washington Post finished above the New York Times in terms of engagement for the first time this year, and HuffPost shot up the rankings to fourth, thus displacing the New York Times yet again.
Worthy of particular note in this month’s rankings were HuffPost and the Washington Post, which climbed to fourth and fifth in our rankings respectively… This is the first time the Washington Post has ranked above its New York rival.Katherine K. Ellis, NewsWhip
The Times has a growth problem on the digital turf, especially in social media, says Joshua Fruhlinger, writing in Thinknum Media.
According to him, although The New York Times’ Facebook page has 16.8 million likes—almost 3x the number of Facebook followers that the Wall Street Journal has—a closer look at the Times’ Facebook following reveals a slowing trend.
“From 2016 to 2018, the paper’s Facebook followers grew by more than 60%,” he says. “However, when looking at year-over-year growth for Facebook, things are slowing down precipitously.”
In 2017, for instance, The New York Times’ Facebook following was growing at a YoY rate of around 25%. Since then, its growth vector has slowed to just 3.5% year over year. If this keeps up, we may see it losing followers on Facebook.Joshua Fruhlinger, tech and business reporter
Fruhlinger cautions with some context, that Facebook usage overall is plateauing, and growth on the world’s largest social network isn’t what it once was. However, the trend appears on Twitter as well.
On Twitter, The New York Times boasts even more followers than it does on Facebook: 44 million. But the number of followers The Times is picking up is plateauing, and when looking at year-over-year change, it’s approaching a near stop and potential reversal.
In 2016, the paper was picking up followers on Twitter at a rate of around 50% year over year. Today, that vector has reduced to just over 5%.Joshua Fruhlinger
However, on LinkedIn the paper has seen a bit of an uptick in follower acquisitions, signaling that its content is finding an audience on that platform.
While there was some slowdown on LinkedIn for The New York Times — its 53% YoY rate in late 207 sagged to 12% by May 2018 — it’s now acquiring new followers on LinkedIn at a rate of 14% Year-over-Year, signaling potential for growth beyond Facebook and Twitter.Joshua Fruhlinger
Even though the LinkedIn numbers might be a slight anomaly compared to the general trend, it also shows that it’s not all bad news.
The Times’ struggles on the digital front—particularly with social media and digital ad revenue—do merit some concern, but then again, this is the company that has been at the forefront of digital innovation, showing the publishing industry what is possible, and it continues to innovate relentlessly.
For example, the publisher’s nimbleness was evident in its swift change in paywall strategy, days after Google’s release of Chrome 76, which practically made metered paywalls obsolete.
The company is making steady progress toward its goal of reaching 10 million total subscriptions by 2025, and it also expects to employ 1,750 journalists by the end of 2019, the largest number in the history of the New York Times.
Although the graphs above paint a not-so-rosy picture, Fruhlinger believes the paper’s growing revenue numbers and continued journalistic bullishness both indicate there are no immediate reasons for worry.
“But trends are trends, and changes in trends are particularly foreshadowing,” he concludes.