- Shares of The New York Times Company fell about 15% after slow digital subscription growth.
- Investors were concerned by a lower-than-expected revenue outlook despite earnings beats.
- NYT faces pressure from competitors like Axios, CNN, and The Verge in a crowded news market.
Shares of The New York Times Company (NYT) slumped around 15% after the opening bell, as investors were disappointed with the publication's slow digitial subscription growth, despite a period of heavy newsflow marked by the US-Iran war and other global headwinds.
Apart from the lack of net digital subscriber growth, investors were also spooked by the lower-than-expected revenue outlook, even though the business exceeded overall earnings and revenue estimates.
Publishers are competing in a congested market where search and referral traffic are impacted by large tech companies and AI platforms, and news credibility is declining.
Media outlets such as Axios, CNN and The Verge are jostling to gain more readership in a busy news cycle, putting pressure on publishers such as NYT to gain market share, according to a report by Reuters.
At 10:30 am EST, shares of NYT were trading 13.99% lower at $65.03 apiece, recovering slightly from the day's low of $64.
ALSO READ: 'There Is No Pakistani Kashmir': Indian Embassy In US Flags 'Incorrect' Headline By New York Times
The New York Times has been combining its journalistic content with lifestyle-oriented businesses like Wirecutter and sports websites, The Athletic and games, such as Wordle, in an effort to increase subscriber value.
According to data gathered by Visible Alpha, The Times added almost 280,000 net digital-only subscribers in the second quarter, compared to analysts' average expectation of 295,300. In the preceding quarter, NYT added 310,000 digital-only members.
ALSO READ: Jefferies Cuts UPL Target Price, Retains 'Buy'; Says Valuation Still Offers Upside
The business anticipates income from digital-only subscriptions ranging from 12% to 15%, with the midpoint falling short of the 14.2% expectation.
In comparison to a forecast of $146.4 million, total advertising income increased by 11.3% to $149.1 million.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
