With print ad dollars plummeting, the move into podcasting continues to pay off for the New York Times, which reports that podcast ad revenue increased 30% during the first quarter compared with a year ago. Executives said consumption of its flagship podcast The Daily has also been a beneficiary of a “surge in audience” due to increased news consumption related to the COVID-19 pandemic. “The Daily’s audience has surged to almost three million downloads every day despite a change in the morning routine for many listeners,” said EVP/COO Meredith Kopit Levien on a conference call with analysts on Wednesday. “The Daily has become an even larger and more sought-after platform for our advertisers,” she said. “Marketer demand for The Daily continues to be strong, although demand for everything we do is softer than it was before the pandemic. But The Daily, both because the audience gains are so significant and because demand is strong relative to other places, The Daily was still a very good story for us in the first quarter and I think will continue to be all year.”
Yet even with that growth, Levien said she expects to see a “softening of demand” for audio inventory during the economic downturn but said it will be “less so” than in the Times’ legacy print business. “Broadly, advertising trends sort of follow what is going on macro-economically, so we’ve seen pressure everywhere in both print and digital,” said Levien. “In digital some of the categories like tech and financial services and telecom, where we tend to do bigger integrated collaborations, have held up better and will likely hold up better.” She expects the Times will have a larger concentration of advertisers in a smaller number of categories in the future.
The growth of audience of The Daily is a reason why the Times continues to invest in audio. Last month it announced technology journalist and entrepreneur Kara Swisher will make the leap to the paper in July, where she’ll produce a twice-weekly podcast that will make its debut in the fall under the banner of Opinion Audio. The Times has already produced two other opinion podcasts: “The Argument” and “The Choice,” a short-run series about the editorial board’s presidential endorsement. And earlier this year it acquired Audm, which has already produced several read-aloud versions of Opinion articles.
Overall, the Times reported first-quarter digital ad revenue decreased 8% while print ad revenue was down 21%. “The Times’s business model, with its growing focus on digital subscription growth and diminishing reliance on advertising, is very well positioned to ride out this storm and thrive in a post-pandemic world,” CEO Mark Thompson said.
Looking ahead, the company expects second-quarter ad revenue will fall between 50% and 55% compared with a year ago, with digital advertising revenue expected to decrease approximately 40% to 45%, largely due to the impact from the COVID-19 pandemic. Thompson said the company has “limited visibility beyond that.”
Thompson said the company plans some cost-cutting and layoffs in the coming months but added that none would be in journalism — and he said the company is hiring for some new initiatives. “We will continue to invest in that strategy, and to hire both in journalism and engineering, data and the other digital product functions. We expect the company’s net head count to increase rather than decrease by year’s end,” he said.