Publishers' earnings calls have revealed that owned and operated businesses, such as subscriptions and apps, are becoming the primary strategies for generating revenue. This shift is in response to a decline in referral traffic from search and social platforms. However, there is optimism that if these businesses are monetized effectively, there could be a positive outlook by the end of 2023 and into the next year.
During the third quarter, The New York Times saw its digital advertising revenue surpass expectations, growing by 6.7% YoY to $75 million. Gannett, on the other hand, experienced relatively flat growth in its digital advertising and marketing services revenues, increasing by just 0.1% YoY to $202.7 million. However, Gannett's CFO announced that digital advertising revenues returned to growth in September, marking the first positive growth in over a year. Overall, Gannett's digital revenues grew by 2.7% to $263.6 million, accounting for 40% of their total revenue.
Dotdash Meredith faced a 12% decline in digital advertising revenue YoY, amounting to $131.2 million. This decline was largely attributed to lower premium sold advertising and reduced programmatic advertising revenue as a result of decreased traffic. However, despite the decline, Q3 performed moderately better compared to the 16% drop in Q2. Dow Jones' total revenue increased by 4% YoY, reaching $537 million. Nonetheless, the company experienced a 3% decline in advertising revenue, which amounted to $91 million. Dow Jones also witnessed a 2% decline in digital advertising during the quarter.
BuzzFeed, on the other hand, reported significant drops in both advertising revenue (35% YoY) and content revenue (32% YoY), highlighting a continuing downward trend for the company. There are reports suggesting that BuzzFeed is considering selling its assets, but the company has neither confirmed nor denied these rumors.
The New York Times achieved a milestone in Q3, surpassing 10 million total subscribers, with 9.4 million of them being digital-only subscribers. The company has set a goal to reach 10 million digital subscribers by the end of 2027, with the expectation that at least half of their subscribers in the coming years will opt for bundled subscriptions. The Times added 210,000 net new digital-only subscribers during the quarter, leading to a 16% YoY increase in revenue, totaling $282 million. Dow Jones' digital subscriptions grew by 12% YoY, reaching 4.6 million subscribers, as the company prioritized cross-brand bundling to generate more revenue from professional consumers. The total revenue from Dow Jones' subscriptions and circulations was $436 million for the quarter, up 5% YoY.The Wall Street Journal records a 10% surge in digital-only subscriptions, reaching nearly 3.5 million. This increase is considered moderate, as it is only 1.8% higher than the previous quarter. Gannett also experiences a slight rise in digital-only subscriptions, going from 1.95 million to 1.96 million. However, Gannett observes a significant growth in the average revenue per user (ARPU) for their digital-only subscriptions. The ARPU grows by 7.4% quarter over quarter and 14% year over year, reaching a record high of $6.82 in the third quarter (Q3). Despite this positive growth, Gannett's CEO, Mike Reed, expresses concerns about consumers feeling the impact of higher interest rates and inflation, which may lead to a decline in consumer confidence.
Publishers emphasize the importance of driving audiences directly to their owned platforms, such as websites, apps, and newsletters. This emphasis comes as referral traffic from social media and search engines continues to decrease. BuzzFeed's CEO, Jonah Peretti, states their intention to incorporate more gaming content into their mobile app to boost user engagement. Following its acquisition by BuzzFeed, HuffPost also notes a record audience traffic on its homepage and web app.
Tasked with increasing pageviews and ad inventory, Gannett's chief content officer, Kristin Roberts, sets out to revamp editorial output. The company also hires reporters dedicated to covering Taylor Swift and Beyoncé, aiming to convert their fan bases into readers. Additionally, Gannett experiments with employing generative AI to produce content.
Overall, publisher executives express cautious optimism as they approach the end of 2023 and look ahead to the full year 2024. While uncertainty persists, the executives believe they will be in good shape if the advertising market remains decent. The New York Times projects that advertising revenues for the fourth quarter may slightly decrease or moderately increase. However, digital advertising revenues are expected to increase. Furthermore, subscription revenue is projected to grow between 8% and 11% year over year in the fourth quarter, with digital-only subscriptions anticipated to increase by 13% to 16% year over year.BuzzFeed's outgoing CFO, Felicia DellaFortuna, is expressing concern about the uncertainty in the advertising market and the decline in traffic. She states that the company is expecting similar revenue trends in Q4 as seen in Q3. These trends suggest that overall revenue in Q4 is expected to decrease by 18-27% compared to the previous year, which marks a moderate improvement from the previous two quarters.
In a separate development, Karlie Kloss is set to acquire i-D Magazine and assume the position of CEO. Henry Blodget, the CEO of Business Insider, is stepping down as the publication returns to its former name. Meanwhile, after 11 years, BuzzFeed's publisher, Dao Nguyen, is also stepping down. Furthermore, Google has partnered with small local publishers to test new artificial intelligence tools for journalists. This move aims to enhance the capabilities of journalists and their reporting proficiency. Additionally, The Telegraph has recently implemented a policy governing the use of generative AI in published text, acknowledging the significance and potential of this technology in the journalism field.