The New York Times, considered the most influential newspaper in the world, reported on Wednesday lower-than-expected revenues in the fourth quarter of 2023 and blamed the war in Gaza and “marketers avoiding some hard news topics like the Middle East conflict” for its lackluster performance.
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Since the beginning of the war in Gaza, the newspaper, ,which is one of the last traditional media outlets to consistently report an increase in both subscriptions and revenues, has faced calls for boycotts from both pro-Israeli and pro-Palestinian factions. However, the company also explained, "We are nonetheless confident in the long-term potential of our digital advertising business.”
The group's revenues stood at $676 million, a 1.3% increase compared to the same period in 2022, but lower than the expected $681 million. The number of the newspaper’s subscribers grew by 300,000 to 9.7 million digitally and 600,000 for the print edition.
The newspaper has reiterated in recent years that it aims to reach 15 million subscribers by the end of 2027. Despite the consistent growth in digital subscriptions, it is still unclear whether it will achieve its goal and what it’s willing to sacrifice to do so, including reducing subscription fees, which could start at one dollar per week and rise to $17 per month.
The newspaper links the last quarter's drop in advertising revenue to reduced earnings from its print edition, alongside a 3.7% fall in digital advertising revenue this year. The Times attributes this decline to decreased earnings from podcasts and creative services.
Surprisingly, the newspaper's most profitable segment doesn't stem from news coverage but from its puzzle games. According to New York Times President Meredith Kopit Levien’s statement, “Games benefited from consistency in the number of people who play Wordle every week and also from our hit homegrown puzzle, Connections, which now has over 15 million weekly players.”
"2023 was a strong year for The Times that showcased the power of our strategy to be the essential subscription for every curious person seeking to understand and engage with the world.
“Our lifestyle products serve scaled audiences for games, sports, cooking and shopping recommendations. By putting them all together and giving millions of people multiple reasons to turn to The Times every day, we delivered business growth and demonstrated our ability to penetrate a large market,” she added.
“All of this progress across the business drove strong earnings per share, adjusted operating profit and free cash flow growth. In fact, in 2023, each hit their highest point since our transformation into a digital-first, subscription-first business began more than a decade ago.”
Sports newspaper The Athletic, which was acquired by The Times in 2022 for $550 million, continued to accrue losses in the fourth quarter of the year as well. However, operating costs shrank and revenue grew by 31% to $38.5 million.
In December 2023, The New York Times filed a lawsuit against Microsoft and OpenAI, accusing the tech giants of copyright infringement. The lawsuit alleges that the artificial intelligence tools created by the companies rely on language learning models "that were built by copying and using millions of The Times's copyrighted news articles, in-depth investigations, opinion pieces, reviews, how-to guides and more."
The Times' lawsuit marks the first case of news companies against artificial intelligence and chatbots, while the technology itself continues to assimilate itself inside the media industry.