The expansion into podcast and audio continued to give a boost to the New York Times revenue during the third quarter, particularly when it comes to advertising. While it did not release podcast-specific data, the company reports its digital ad revenue increased 40% year-over-year during the quarter to $67 million. And even with the impact of the pandemic there was growth as digital ad revenue was up 23% versus the third quarter of 2019.
“The third quarter results reflect the benefits of the overall market recovery as well as marketer interest in our proprietary products including the first-party data that stems from our subscription business and our growing offering of captivating podcasts,” said President/CEO Meredith Kopit Levien during a conference call Wednesday with analysts.
As the print business continues to shrink, the Times’ focus on podcasting and other digital products has allowed it to diversify. Kopit Levien said it has also become more stable. “We like our ad business better now; we particularly like our digital ad business better,” she said. “We’re a little bit less susceptible to the swings from one quarter to the next. We’re also optimistic and really like our position in audio. There seems to be quite a bit of demand for high quality audio and we’ve got a great suite of audio products that are preforming well with marketers and with consumers.”
Barclays media analyst Kannan Venkateshwar agrees, and says digital ad revenue would be a “potential tailwind” over the long-term. “We continue to believe that NYT has done a much better job of pivoting its business model away from legacy revenue streams towards new ones compared to most legacy media companies,” he wrote in a note to clients. “We believe the company’s non-news services, such as audio, Cooking, and Wirecutter, can be monetized much more effectively via a dual revenue stream over time.”
The Times tells investors it is investing more in its audio business too with the growing number of employees contributing to an overall nine percent increase in its cost structure. That includes a team that is working on a new audio-focused app including its podcast lineup that beta-launched last month. In addition to the new app, the Times has also begun experimenting with featuring audio stories in its main news app. Last month, it began experimenting with ‘Listen,’ a tab in its news app that features a selection of signature Times stories read aloud by the reporters who wrote them.
Audio has become a bigger part of the Times’ reach during the past few years. The company says it now reaches 20 million listeners each month via audio. That includes the four-year old daily news podcast The Daily. Last year the paper also acquired Serial Productions for $25 million and Audm for $8.6 million, and formed a creative and strategic alliance with This American Life.
The Times reported total third quarter revenue of $509.1 million, a 19% increase compared to a year ago. Total advertising revenue, including both digital and print, grew 40% to $110.9 million. The Times says it was not only digital that had year-over-year growth, but so did its print business with print advertising revenue increasing primarily in the luxury and entertainment categories, as a result of the impact of the comparison to weak print advertising revenues a year ago caused by reduced advertiser spending during the earlier stages of the Covid-19 pandemic.