The coronavirus has arrived in the publishing industry. Ironically, the New York Times formulated a warning at the beginning of the week because of the spreading corona virus, which is likely to be heard throughout the media industry. CEO Mark Thompson warned in a mandatory announcement that ad bookings would develop worse than expected due to the Corona crisis. This is the first time the industry is feeling the economic effects of the lung disease.
Even the top dog is not immune. The New York Times, the industry leader for years, is preparing investors for more troubled times because of the consequences of the coronovirus. In a mandatory notification the New York Times Company stated that it had “started to feel certain economic consequences.”
The US company has “registered a slowdown in international and domestic ad bookings, which we associate with the uncertainty and fear of the virus,” said CEO Mark Thompson.
New York Times expects a stronger decline in the digital advertising business due to Corona
The New York Times Company, which has been complaining about a declining advertising business for some time, originally expected digital advertising revenues to decline by 10 percent. Thompson is now forecasting a 10 to 20 percent decline in sales in the digital advertising business in the current quarter.
At the same time, the long-established company listed in the S&P 500 index confirmed all of the business goals that had been promised so far in the March quarter. In the same breath, Mark Thompson highlighted the strength of the subscriber business, which had rebounded in terms of revenue over the past few quarters.
No influence from subscriber business
“Unlike many publishers, our business model is heavily driven by subscriptions rather than advertising. We have (due to the coronavirus – A.d.R.) felt no adverse impact on our subscriber growth or the expected increase in subscriber revenue, which remain strong and in line with our outlook, ”said Thompson.
The New York Times only had record growth of in mid-January for the past fiscal year one million new subscribers announcedwho opted exclusively for the digital offer. In total, the “Gray Lady” already has over 5 million subscribers, 3.4 million of whom preferred the digital offer.
Share only briefly under pressure
The flagship US newspaper, which has already won 127 Pulitzer Awards, has achieved a remarkable turnaround under CEO Mark Thompson, who took office in 2012, by switching to digital subscriptions, resulting in an increase in the value of NYT shares since the 25 Annual lows at the height of the financial crisis.
Over the past eleven years, the New York Times Company’s shares have soared more than 900 percent, reaching $ 40 in mid-February a 15 year high. Since then, the shares have fallen 7 percent in the wake of the Wall Street sell-off.
Today’s sales warning, however, had little influence on the price development: On a very friendly trading day, the NYT share fell by only half a percent despite the bad news after the paper had been four percent behind for a short time.