Innovation comes at a price, it turns out. The New York Times’ investment in new digital products ate into its first-quarter earnings.
The company has been busy developing new digital products to capture readers who fall on either the low or high ends of the engagement spectrum. The NYT Now free mobile app on one end and, at the other, Times Premier, a premium service aimed at diehard fans, rolled out after the end of the first quarter, and more vertical apps are on the way.
In the company’s first-quarter earnings call, it disclosed that operating costs rose 3.8 percent to $365.8 million, mainly due to expenses associated with new products. Operating profit was $22.1 million in the quarter, down from $28.1 million in the same period of 2013.
On the bright side, the Times’ print and digital revenue is up for the first time in several years. The paper also continues to add digital subscribers, contributing to a 13.6 percent increase in overall digital circulation revenue over the year-ago quarter.
More in Media
Earnings from social and search players signal that AI will be a long-play investment
Giants like Google, Meta and Microsoft say investors and advertisers might have to wait longer for AI to generate a better return on investment.
Why some publishers aren’t ready to monetize generative AI chatbots with ads yet
Monetization of generative AI chatbot experiences is slow going. Some publishing execs said they’re not ready to add advertising to these products until they scale or can build a subscription model first.
Media Briefing: Publishers who bet on events and franchises this year are reaping the rewards
Tentpole events and franchises are helping publishers lock in advertising revenue.