The New York Times, Gannett and News Corp. each reported quarterly earnings this week, shedding new light onto a dismal start to 2020. Like so many other industries, media companies have had to institute cost-cuts, layoffs and furloughs due to a decrease in advertising and near-shuttering of their events businesses.
This week’s quarterly earnings calls give an additional glimpse at how the business of media has borne the brunt of the pandemic—as well as the glimmers of hope. Here are five takeaways:
Digital subscriptions are up despite media publications putting journalism in front of paywalls
The New York Times, Gannett and News Corp. each reported growth in the number of subscriptions. NYT reported a record-breaking uptick (more than 39% growth compared to Q1 last year) of 587,000 net new digital subscriptions. Gannett saw a 29% growth in subscriptions compared to last year to about 863,000 digital subscriptions. News Corp’s Dow Jones properties saw a 20% growth in digital-only subscribers to over 2.5 million, which amounted to a 15% growth in digital only-subscribers alone at The Wall Street Journal.
Covid-19 coverage is continuing to attract record-breaking traffic
Since mid-February, Gannett saw more than 650 million views on its Covid-19 coverage. The Wall Street Journal had what was described in its earnings call as “record traffic” across digital networks. The Times converted some of its readers, which skew younger and geographically and ethnically more diverse than its typical subscriber, into paying customers.
“You can see this as a period where we’re leaning into very strong demand,” said Meredith Kopit Levien, NYT’s COO, during its earnings call.
Virtual work has been done (mostly) successfully
Since March, 95% of Gannett workers who are not related to production or delivery have been working from home, which amounts to no change in operational or financial disruptions, Gannett said in its earnings call. New York Times staffers have also largely been working from home since March. Managers told staffers earlier this week they shouldn’t expect to be back in the office until after Sept. 8.
“Given the current effectiveness of remote working, we don’t believe this decision will have a significant impact on business results,” said Times president and CEO Mark Thompson, noting that employees achieved “a high level of productivity.”
Print advertising is down about 20%; digital advertising is up and down
At Gannett, print advertising was down 21.2% compared to the previous year, with print ad revenue amounting to $267.6 million this quarter. The Times reported a decrease in print advertising of 20.9%, which amounted to $55 million in revenue. The Times pointed to several ad categories that were affected by Covid-19, in particular, luxury, media and entertainment.
“We will have a larger concentration of advertisers in smaller numbers of categories,” Kopit Levien said. The Times also saw a decrease in digital advertising of 8%, which amounted to revenue of $51.2 million.
Print advertising at Dow Jones decreased by 18% from the year before but was offset by significant growth in digital advertising, which grew 25% compared to the previous year. As News Corp. chief executive officer Robert Thomson said twice on his earnings call, “This is in strikingly marked contrast to the performance of The New York Times.”
Media organizations are trying to figure out what’s next
Most publications are bracing for their next quarter to hit hard.
NYT leadership said job cuts are likely, but none that affect “journalism.” Overall, Thompson, said he’s expecting headcount to grow by the end of this year.
Without giving specifics, News Corp. leadership said potential cuts will come after a “candid assessment” of the business “when the world finally returns to the new abnormal,” Thomson said. Among those cuts at the parent company will include adjusting executive pay like that of executive chairman Rupert Murdoch, who will forego his annual cash bonus. Thomson will only take 25% of his annual bonus.
Financial cuts already in place at Gannett, including pay cuts, furloughs and cuts to discretionary spending, has saved the company up to $125 million for the second quarter.
“No one knows how the current crisis will play out. Hopefully the worst is behind us, but we just don’t know,” said Gannett CEO Mike Reed in the publisher’s earnings call. “It’s so very hard today to know what next year will look like.”