The New York Times Company remains focused on the long game even as digital subscription growth flattens and advertising shows ongoing weakness. On a Thursday earnings call, executives described new products that it hopes will bring in multiple revenue streams, but cautioned that they would not yield a profit in the near future.
The new offerings will include digital subscriptions that cover niche topics like food and travel for a lower price than the standard subscription. The company is also planning to expand its conference business, develop games and bolster its crossword franchise.
On the call, analysts pressed for details about the new low-priced subscriptions and asked if they would cannibalize the company’s existing digital offerings — which are regarded as essential to the Times‘ future but whose growth has stalled. Times VP Denise Warren said the company had “identified many people interested in a lower price point” but that cannibalization was not an issue because these people “come in at a differeent part on the demand curve.”
CEO Mark Thompson did not provide any price details, but suggested the company could be in a position to charge more to devoted digital subscribers who enjoy getting full-access entirety of the Times’ content. He added that the new niche products could bring in revenue this year but that it “will take till late 2014” for the new initiatives to result in an operating profit.
For the near future, the Times continues to face serious financial headwinds. The company has recently relied on major increases in its print subscriptions to increase revenue, but may be unable to do so much more. Meanwhile, advertising remains bleak (digital dropped 4 percent last quarter) with executives on the call offering only tepid explanations — like a weak Oscar race — when analysts questioned the Times’ ad sales strategy. The strategy may get an overhaul as when the company fills a new position to head up its ad sales.
An analyst, citing the Times’ large cash reserves, asked if the company had an intention to go private. Thompson, who has just completed his first full quarter as CEO, said no. Executives also said the company would continue to suspend its dividend which provides income to the families that own the Times.