The New York Times has hit a rare bump in an otherwise smooth climb. The publisher added 280,000 net digital subscribers in the second quarter, short of Wall Street’s forecasts, and its shares slipped despite healthy profits.
The New York Times remains the standout success of the subscription era, ending the quarter with 13.4 million digital subscribers and a bundle that most rivals have failed to match.
Total revenue rose 11%, digital subscription revenue climbed 16.4% to $408m, and adjusted earnings reached 69 cents a share, so the miss was about pace of growth, not health.
But the miss still stings, and the outlook stung more. Investors prize the New York Times for dependable subscriber growth, and guidance pointing to slower subscription-revenue growth in the third quarter is what sent the shares lower.
The company’s own explanation is instructive. It pointed to growing competition and tight discretionary spending by readers, two forces that squeeze exactly the kind of optional monthly subscription a news app represents.
