What The New York Times’ results say about Australia’s media stocks

afr.com:

The New York Times Company reported its quarterly results on Tuesday (Wednesday AEST), and the market was surprised to learn it had smashed its digital advertising revenue expectations.

Analysts expected the digital advertising market to suffer a low to mid-single-digit fall. Instead, it rose 6.5 per cent to $US73.8 million ($112.7 million), fuelling a better-than-forecast $US590.9 million in revenue for the Gray Lady in the three months to June 30. Print advertising fell 8.6 per cent to $US44 million.

The New York Times has posted higher than expected digital advertising revenue.  Getty

Meredith Kopit Levien, chief executive of The New York Times Company, said its strategy to bundle news subscriptions with other products – cooking, games, product reviews and sports news website The Athletic – was working.

She said more than half the new digital subscribers added in the last quarter, about 180,000, subscribed to the entire bundle of products that the Times offered.

The result has buoyed the company’s rival, the News Corporation-owned Dow Jones and its flagship publication, The Wall Street Journal. “In our view, the better-than-expected ad revenue outcome for NYT is a positive indicator for News Corp’s Dow Jones segment,” E&P Capital analyst Entcho Raykovski wrote on Wednesday morning.

The result “underscores the importance of quality in driving digital subscriptions, in a sea of sewage ‘news’ content in general,” said Morningstar’s Brian Han.

“Advertisers, marketers and media companies, being perennial optimists, may claim some green shoots from NYT’s numbers and the recent ‘less bad’ advertising declines,” Mr Han told The Australian Financial Review. “But, let’s not kid ourselves. When the shit hits the fan, advertising