The New York Times Company (NYSE:NYT) Q1 2016 Earnings Conference Call Transcript

May 03, 2016 • 11:00 am ET

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The New York Times Company (NYSE:NYT) Q1 2016 Earnings Conference Call Transcript

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Presentation
Operator
operator

Good morning. My name is Jessa, and I will be your conference operator today. At this time, I would like to welcome everyone to The New York Times Company First Quarter 2016 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) Thank you.

Mr. Harlan Toplitzky, Executive Director of Financial Planning and Analysis, you may begin your conference.

Executive
Harlan Toplitzky

Thank you, and welcome to the New York Times Company's first quarter 2016 earnings conference call. On the call today, we have Mark Thompson, President and CEO; Jim Follo, EVP and CFO; and Meredith Kopit Levien, EVP and Chief Revenue Officer.

(Forward-Looking Cautionary Statements)

In addition, our presentation will include non-GAAP financial measures, and we have provided reconciliations to the most comparable GAAP measures in our earnings press release, which is available on our website at investors.nytco.com.

With that, I will turn the call over to Mark Thompson.

Executive
Mark Thompson

Thanks Harlan, and good morning everyone. 2016 is the first year of implementation of Our Path Forward, our new strategic direction for the New York Times Company. As you know, the plan calls for the doubling of our digital revenue. To achieve that, we need to more than double our audience, to deepen their engagement, and to innovate and develop our digital advertising and subscription models while running our cash generative print platforms effectively and managing costs tightly across the whole company.

Our big themes are innovation and creativity in storytelling and user experience, backed by continued investment in great journalism, audience and digital subscription growth, driven by better use of data and clearer offers and customer journeys, innovation in digital advertising, where we are seeing great success with branded content and smartphone. International, where we've made some important recent announcements, and tough mindedness about costs everywhere.

The first quarter of 2016 saw all of these themes playing out in the real world. Our audience grew strongly. At 113,000 unique users in March, our global audience was the largest ever recorded for the Times. The balance of our audience is shifting, too. According to ComScore, we have 31 million US millenials consuming Times journalism on digital in March, 11 million more than the March in the year previous. Audience engagement is growing steadily, as well.

It's not surprising, then, that this was a very strong quarter for our digital subscription business. We added 67,000 net new digital subscriptions to our news products, the highest number of quarterly adds since Q4 2012, and a real achievement as our pay model reaches its fifth anniversary. The rate at which we are adding subscriptions is continuing to accelerate. Revenue for our digital news subscription business grew 13% year-over-year.

Perhaps this is a good moment to celebrate our other digital subscription business, which is the Times crossword product. This separate subscription count reached 196,000 in the quarter, and since then has exceeded 200,000. Revenue from this business is of course much smaller