The New York Times (NYT) Company is a global media organization that aims to make journalism insightful, meaningful and essential to the daily lives of global community it serves. The products/services of the company includes physical delivery of The New York Times (NYT) or The New York Times International Edition, apps for array of smartphones and tablets for getting acquainted with the news published in these papers, NYT cooking app with more than 16,000 recipes, digital subscription packages, Times Insider for behind the scenes updates and premium crosswords and other games through NYT store. The company is also listed in New York Stock Exchange (The New York Times, n.d.).
The following table summarizes the revenues of the company for the year ending 2017 and 2016 derived from Annual Report of New York Times:
Comparing the financial reports, we can see that overall revenue has increased by 7.73%, reflecting a 14.52% increase in revenue from subscription, 3.83% decline in revenue from advertising and 15.55% increase in revenue from other sources.
The revenue from advertising comprises of the revenue from display and classified advertisement in printed and digitized format. The print advertisement has decreased by 13.91% due to significant decline in display advertisement by 6.35% while there is an increase of 14.15% in digital advertisement resulting from enhanced revenue from smartphone advertisements, branded content and revenue associated with digital marketing agencies, HelloSociety and Fakelove. It shows that the company is gradually shifting from the traditional print advertising to digital advertising. However the overall revenue from advertisement has decreased.
The annual report shows that subscription and circulation fees from print and digital products calculated on the basis of number of copies sold and rates charged has increased by 14.5%. This is due to the increase in digital only subscriptions of news and other products by 45.9% and 53.6% respectively. The digital subscribers of news products has increased by 613,000 and that of other products has gone up by 166,000 that has resulted in the growth of subscription revenue.
In addition to advertisement and subscription, the company also generates revenue from other sources like news services/syndication, digital archive licensing, building rental income, affiliate results, NYT live and retail commerce. The revenue from other sources has also increased by 15.6%. The acquisition of Wirecutter in October 2016 is proving to be beneficial for the NYT as it has contributed in increasing revenue primarily with the means of affiliate referral revenue.
Analyzing on the basis of financial statements, the business model adopted by NYC is working effectively. In simple terms, business model is a sustainable way of doing business (Nielsen & Lund, 2014). It is the combination of strategy and revenue model to run the organization profitably in long-run by delivering products that are valuable for the customers (Dasilva & Trkman, 2013). NYT is adapting the changes in the business environment to retain the existing customers as well as gain new ones. The main source of income for the company is advertisements and subscriptions. To adjust itself with the technological development, it is shifting its attention towards increasing digital advertisement and subscriptions which is helping the company in maximizing the revenue. The revenue of the company has increased by 7.7% which is the proof that the business model is working for it. Instead of concentrating on the print media only, it is also using digital platform to grab more audience and address the need of diverse people. Similarly, in addition to the core news related products, cooking and games application are developed taking various interest groups into consideration.
The advancement of technology has made it easier for people to remain up-to-date with current happenings around the world. General information, current events and news can be accessed free of cost through different medias. However, the long history has established NYT as a reliable source of information so people will still be willing to subscribe it. In addition, there are certain people who prefer print media instead of digitized one, so NYT is capable of capturing this segment also. The diverse product offerings has surely increased the reach of the company that will help it sustain despite the increasing competition. But, it is necessary for the company to operate flexibly incorporating the changes in technological and business environment.
Dasilva, C., & Trkman, P. (2013). Business Model: What it is and What it is Not. Long Range Planning, 1 (1). doi:10.2139/ssrn.2181113
New York Times. (2017). Annual Report . Retrieved from https://s1.q4cdn.com/156149269/files/doc_financials/annual/2017/Final-2017-Annual-Report.pdf
Nielsen, C., & Lund, M. (2014, March). An Introduction to Business Models. The Basics of Business Models , 1 (1). doi:10.2139/ssrn.2579454
The New York Times. (n.d.). Retrieved August 31, 2018, from https://www.nytco.com/