Audio is playing a growing role at the New York Times where its flagship podcast The Daily now averages more than two million downloads a day, many to listeners who are significantly younger than the average newspaper reader. “The Daily audience continues to grow and we don't see that moderating in any way,” said EVP/COO Meredith Kopit Levien. “As the audience grows, the ad business grows—and that's happening at a really nice clip.”
The New York Times Company said growing advertising sales for its audio products helped offset a downturn in its overall digital ad revenue during the third quarter. The publisher didn’t released podcast-specific billings, but it said revenue was also boosted by The Daily’s sister television series “The Weekly” on FX and Hulu.
Levien said “The Weekly” may be on television but it’s benefiting from its association with audio. “The Daily is also serving as a great distribution mechanism for new programs,” she said on a conference call this week. “Our audio strategy of having The Daily as an envelope to send other things out into the world is really working,” she told analysts.
The Daily also played a role in rolling out 1619, the Times-produced podcast series hosted by Nikole Hannah-Jones that tells the story of the first slave ship to arrive in Virginia, spawning 250 years of slavery in the U.S. Launched in the feed of The Daily, Levien said 1619 has been a “huge hit” for the company. “We're continuing to invest pretty aggressively into our audio newsroom and we have an expectation that we will put more product into the world as we did with 1619 with that audio newsroom,” she said. “And I think in the near term that’s very good for our ad business. There's a lot of demand for high-quality audio.”
The Times says its overall digital revenue decreased 5.4% while print advertising declined 7.9% during the third quarter. CEO Mark Thompson said the main reason digital ad sales were lower was the company faced a “tough comp” versus what it billed a year ago. He also said the Times had fewer large-scale ad deals than during the same period in 2018. “Like other publishers, we’re seeing continued turbulence in the digital advertising space,” Thompson explained.
The company expects it will see further declines in digital revenue in 2020 after it decided to no longer accept third-party programmatic advertising within the Times’ mobile apps. Thompson explained during a conference call with Wall Street analysts on Wednesday that it is part of their strategy to be a “subscription-first” company. “Where there is a trade-off to be made between engaged user experience and media advertising revenue, we will increasingly favor the subscription side,” he said. “That will result in the loss of digital advertising revenue in the single-digit millions. But we believe that this will be more than made up by gains in engagement and a higher propensity by app users both to subscribe and retain.”
The Times aims to have at least 10 million subscribers by 2025. It ended the third quarter with nearly 4.1 million digital-only subscribers, and 4.9 million total subscriptions.
Audio Reaches Millennials
For a newspaper company racing to reinvent itself as a digital media outlet, audio is playing a leading role. Three-quarters of The Daily’s listeners are 40 years old or younger and 45% are 30 years old or younger, according to Thompson. He said it’s “really exciting” for the Times to be publishing a “serious journalistic product” and have Millennials spending 20 minutes or more with the brand on their smartphone.
“We have lots of running room in audio,” Thompson told analysts. “The Daily is a monster hit with an astonishingly valuable audience and it just continues to grow. We're also advancing our plans to expand our creative capabilities, our audiences and our inventory in this promising category.”
Levien added that the marketing efforts by the Times on The Daily have also been especially useful in driving subscription sales. “If you look at across the portfolio, we've made a sizable investment in our journalism in audio, and that's really paid off,” she said.