The New York Times Company is pressing ahead with its video expansion strategy, both within its own apps and on external platforms, while maintaining its goal of reaching 15 million subscribers by the end of 2027. Chief Financial Officer William Bardeen outlined the company's video ambitions at the Citi Global TMT Conference on September 9, emphasizing that short-form clips, video versions of existing shows, and longer productions can leverage the reporting already produced by its newsroom of about 3,000 journalists.
This strategy asks investors to accept a period of faster spending before video becomes a significant revenue line. The market's reaction has been muted, with NYT shares closing Friday at $66.88, up 0.5% for the session and down 0.6% from a week earlier, according to Yahoo Finance data. Management's argument is clear: audience growth and advertising must outpace the rising costs of producing more journalism and formats.
At the conference, Bardeen detailed plans for a Watch tab dedicated to short clips and a Shows tab featuring programs developed from podcasts. The company also intends to selectively distribute content on major video platforms. The key advantage, he noted, is the robust reporting infrastructure behind these productions; the added work lies in production, distribution, and converting viewers into frequent users of the company's bundled products.
The latest financial results provide a substantial base for this strategy. As of the end of June, the Times had 13.35 million total subscribers, including 12.80 million digital-only subscribers, after adding 280,000 net digital-only customers during the second quarter. The company reported quarterly revenue of $762.5 million, an 11.2% increase year-over-year, as stated in its SEC filing.
Subscriptions remain the core growth engine. Digital-only subscription revenue climbed 16.4% to $407.9 million, supported by a 3.1% rise in average revenue per user to $9.94. The company's bundle—which combines news with Games, Cooking, The Athletic, Audio, and Wirecutter—offers multiple avenues to improve retention. A viewer who watches more content could become more valuable even without paying for a separate video product.
Advertising provides a more immediate revenue opportunity. Digital advertising jumped 20.7% to $114.0 million in the second quarter, driven by stronger demand and increased ad inventory. Print advertising, however, fell 11.1% to $35.2 million. While more watch time could create new digital ad placements, the company's conference presentation framed video monetization as future upside rather than an established business at scale.
The cost side is already evident. Second-quarter adjusted operating costs rose 10.0% to $607.2 million. Despite this, the Times expanded adjusted operating profit by 16.1% to $155.3 million, lifting its adjusted margin to 20.4% from 19.5%. However, management expects adjusted costs to increase by 8% to 9% in the third quarter, with journalism, marketing, product work, and performance-related compensation all competing for the same incremental revenue.
Management's revenue guidance offers some cushion. It forecasts third-quarter digital-only subscription revenue growth of 12% to 15% and digital advertising growth in the mid-to-high teens. These rates exceed the cost growth guide, though quarterly revenue mix could affect the actual margin outcome. The ongoing decline in print advertising remains a drag that consolidated growth must absorb.
The subscriber target is now a clear metric. Moving from 13.35 million at June 30 to 15 million by December 2027 requires roughly 1.65 million net additions, or about 275,000 per quarter across six quarters. This pace is nearly identical to the 280,000 digital-only additions seen in the second quarter, meaning the target does not require an abrupt acceleration if churn, pricing, and print losses remain manageable—but it does require consistent acquisition momentum.
Cash generation provides some tolerance for the increased spending. Free cash flow for the first half rose to $265.7 million from $193.2 million a year earlier, while trailing-12-month free cash flow reached $623.0 million. The counterargument is that video may deepen engagement without producing enough paid conversions or premium advertising to justify a permanent cost layer. The next key evidence will be quarterly net additions near the 275,000 path, digital ARPU holding up, and adjusted profit continuing to grow faster than costs.
