New York Times Says Missed Revenue Impacted by Advertisers ‘Avoiding Some Hard News Topics’ Like Israel-Gaza War

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Digital ad revenue fell 3.7% year-over-year, with five fewer days in the quarter and declines from podcasts and creative services

TheWrap/Christopher Smith/The New York Times Co.

The New York Times reported mixed earnings on Wednesday, which the company attributed to strong subscription growth, decreasing digital advertising revenues and the organization’s multi-revenue stream model.

Here are the top-line results: 

Revenue: $676.2 million, a 1.3% increase from the same period in 2022, but lower than Zacks Investment Research estimates of $680.9 million 

Earnings: Diluted earnings per share is 66 cents, beating Zacks Investment Research estimates of 60 cents for the quarter 

Subscribers: 10.36 million total subscribers, 9.7 million digital-only subscribers, an increase of 300,000 net digital-only subscribers since the end of the third quarter

In the third quarter of 2023, the New York Times reported subscription growth to over 10 million subscribers, boosted by an increased emphasis on digital-only offerings. The outlet has repeatedly stated that it intends to reach 15 million subscribers by the end of 2027. 

However, in the fourth quarter of 2023, digital advertising revenue decreased 3.7% year-over-year, which the Times attributes to five fewer days in the quarter compared to 2022, as well as declines in revenue from podcasts and creative services. 

Total advertising revenue in the fourth quarter came in lower than expected, attributed to the decline in print ad revenue. The Times said that their digital advertising revenue was impacted by “marketers avoiding some hard news topics like the Middle East conflict,” which the outlet covers relentlessly. 

“We are nonetheless confident in the long-term potential of our digital advertising business,” Levien said on Wednesday’s earnings call. 

Total digital-only average revenue per user grew 3.5% year-over-year to $9.24 as a result of subscribers upgrading their subscriptions from promotional to higher prices. The growth in digital subscriptions and ARPU were the driving factors in subscription revenue growth from digital offerings of 7.2%. 

The Athletic, which was purchased by the Times two years ago for $550 million, continued to lose money in the fourth quarter. However, The Athletic’s operating loss shrank to $4.4 million, from $9.6 million a year earlier. Revenue at The Athletic grew 31.3 percent, to $38.5 million.

Analysts surveyed by Zacks Investment Research were expecting earnings of 60 cents per share on revenue of $680.9 million in the fourth quarter of 2023.  

 “2023 was a strong year for The Times that showcased the power of our strategy to be the essential subscription for every curious person seeking to understand and engage with the world,” President and CEO Meredith Kopit Levien said in a statement. “Our market leading news and lifestyle products commanded large and deeply engaged audiences, and our multi-revenue stream model contributed to improving profitability. We realized strong annual growth in earnings per share, adjusted operating profit, and free cash flow, which each hit their highest point since our digital transformation began more than a decade ago.”

In the fourth quarter of 2022, the Times reported diluted earnings of 43 cents per share, compared to 41 cents per share for the same period of 2021. The Times reported total revenue of $667.5 million, a 12.3% increase year-over-year. Digital-only subscription revenue grew 31% from 2021 to $269.2 million in the fourth quarter of 2022. Digital advertising revenue in 2022, however, only grew .6% to $111.9 million. 

On Wednesday’s earnings call, Levien touted the Times’ reporting in 2023, “proving indispensable to so many people,” as well as the outlet’s lifestyle offerings which have “scaled audiences for games, cooking and shopping recommendations by putting them all together and giving millions of people, multiple reasons to turn to the times every day.” 

“We delivered business growth and demonstrated our ability to penetrate a large market,” Levien continued. “We drove this performance, amidst a tough year for the news industry in which we and others faced persistent headwinds.”

The Times noted that they continue to see lower levels of “casual news audiences,” which the company attributes to dominating tech platforms. Additionally, the outlet’s “ad business grappled with the heightened market volatility impacting publishers.”

“Our strategy is designed to counterbalance these headwinds and position us to be a category-leading global media subscription business,” Levien said. 

According to the Times, the subscription bundle accounted for a majority of subscriber starts in 2023, making up 41% of the outlet’s subscriber base at year-end. The Times says that bundle subscribers are significantly more engaged with Times content and are willing to pay more over time. Subscription engagement reached its highest point in nearly three years by the end of 2023. 

“It was a challenging year on the ad market for publishers,” Levien said on Wednesday, however, the Times saw “real momentum as we extended our ad products across the portfolio, particularly to The Athletic and Games where we see a lot of running room.”

The New York Times filed an ambitious lawsuit in December against Microsoft and OpenAI, accusing the tech giants of copyright infringement. The suit argues that the generative A.I. tools that Microsoft and OpenAI have created rely on large language models, or LLM, “that were built by copying and using millions of The Times’s copyrighted news articles, in-depth investigations, opinion pieces, reviews, how-to guides and more.”

The Times’ lawsuit marks the first blockbuster case from news publishers over generative AI capabilities and how chatbots were trained, as the technology begins to embed itself in the media industry.


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