New York Times subscriptions boosted by bundling of news and lifestyle content

By Jaspreet Singh

Aug 6 (Reuters) - The New York Times' quarterly subscription revenue surged on Wednesday, showing its strategy of combining core news content with more lifestyle-focused offerings was paying off, sending its shares up nearly 14% to a record high.

The publisher NYT.N has leaned heavily in recent years on sports content from The Athletic, games such as Wordle and offerings like the product-review section Wirecutter to draw users as interest in news wavers and economic uncertainty hits consumer spending.

It added about 230,000 digital-only subscribers in the April-June quarter, more than a Visible Alpha estimate of 215,800 additions, pushing its digital subscription revenue up by 15.1%.

Of the total 11.30 million digital-only subscribers, about 6.02 million are bundle and multi-product users. Including print, its overall subscriber count now stands at 11.88 million.

The company has a target of 15 million subscribers by 2027.

"This quarter, we crossed the threshold of having at least 50% of our subscribers on the bundle or multiple products, which is important because those subscribers engage more, stay longer and pay more over time," said CEO Meredith Kopit Levien.

The company has also been banking on a wide array of popular podcasts, including The Daily and The Ezra Klein Show, and newsletters such as DealBook to attract users.

It also signaled confidence for the current quarter, predicting subscription revenue growth of between 8% and 10%. Analysts estimated a 7.3% rise, per data compiled by LSEG.

AI DEALS

Kopit Levien said NYT was open to more AI deals after it struck an agreement with Amazon.com in May, its first licensing deal focused on the technology. She also said the company was well-positioned despite a decline in search traffic for publishers due to rising use of AI tools such as ChatGPT.

NYT has not disclosed the Amazon deal value, but media reports have said it would likely pay the newspaper $20 million to $25 million a year.

Growth in the Times' affiliate, licensing and other revenue is expected to speed up to high-single-digits in the current quarter, from around 6% in the second, due to the Amazon deal.

Digital-only average revenue per user grew 3.2% to $9.64 in the quarter. That pushed up revenue by more than expected 9.7% to $685.9 million, while adjusted profit per share of 58 cents also surpassed estimates of 50 cents.

Digital advertising revenue surged 18.7% to $94.4 million.