New York Times Co at Citi Global TMT Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jason Bazinet - Citi - Analyst : I didn't even have to ask Anthony. So I want to start with maybe just a big picture question because you're on a super interesting journey, I think. But maybe we can just level set for those that maybe aren't in the weeds, and just give us a high-level overview of your strategy. What is the mission that you're on?

Question: Jason Bazinet - Citi - Analyst : That's great. Can I ask one clarifying question? On the engagement, the record levels of engagement. Do you measure that just simply is how many hours -- or is it more nuanced.

Question: Jason Bazinet - Citi - Analyst : Okay. So as buy-siders sort of follow your journey as you execute on your strategy, I think that it's natural for them to sort of look at what is going on with your ARPUs and what is going on with subscribers, right? So can we just dig a little bit deeper on those two sort of prongs. So on the ARPU side, you guys, I think, is part of your tactics, not your strategy, you've done promotional pricing. And if I'm sitting there as an investor, and I'm trying to come up with a forecast two years, three years down the road of where can those ARPUs go given there's some promotional activity sort of happening on the boundary layer for those new customers coming in. What advice would you give to your audience?

Question: Jason Bazinet - Citi - Analyst : So when you say there's more there in terms of your product, you're just saying that there's just more content there because the investments that you've made in years...

Question: Jason Bazinet - Citi - Analyst : It's very interesting. So I think it was in '22, I think that was the year when you really began to focus on bundles right?

Question: Jason Bazinet - Citi - Analyst : Okay. I think I had this right. When I look at your disclosures, your bundled ARPUs have generally been falling, but the single product services that you have like News have generally been rising. Can you just talk...

Question: Jason Bazinet - Citi - Analyst : Okay. Can you just talk a little bit about what is causing this dichotomy to occur in the...

Question: Jason Bazinet - Citi - Analyst : All sounds very sophisticated and deliberate. It's good.

Question: Jason Bazinet - Citi - Analyst : Yes. So can we shift now from pricing and talk more about marketing and gross -- so on the marketing funnel, you've talked a lot about the marketing funnel. You've noted you have 150 million registered users. And what is -- is it 15 million e-mail accounts? Is that...

Question: Jason Bazinet - Citi - Analyst : So how do -- I mean, can you just describe sort of what you -- as you talk about these numbers in these various buckets, what is the process that's sort of going on -- as you look at those as a percentage...

Question: Jason Bazinet - Citi - Analyst : That's great. When I was looking in your annual filings, you only give this number once a year. If I've done the math correctly, you spent about 5% of your revenues on external marketing, right?

Question: Jason Bazinet - Citi - Analyst : That's right.

Question: Jason Bazinet - Citi - Analyst : That's right. And my question is, what is it when you spend money on that? Is it that you're trying to get more registered users -- is that more or further down in the conversion funnel. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 2:50PM, NYT.N - New York Times Co at Citi Global TMT Conference

Question: Jason Bazinet - Citi - Analyst : Okay. That's great. I can't prove this, I couldn't find anything in your old disclosures, but I would imagine when you were a print-only business, the vast, vast majority of your customers were in the tri-state area. Maybe you had a few sort of in L.A. or some in London or whatever.

Question: Jason Bazinet - Citi - Analyst : Definitely majority. But now as I look at some of the numbers you've given and maybe you can share these, it feels like when you think about where your customers are coming from, it is certainly the continental in the United States and even outside the United States. Is that fair?

Question: Jason Bazinet - Citi - Analyst : When we read about in the press cutbacks that let's say, local newspapers or making or reviewed about difficulties that maybe some of your competitors might be having that are perceived as competitors in the traditional newspaper business, is that relevant? I mean do you pay attention to those things? Or are you just -- you're on your mission, you're executing, and it doesn't really matter what the competition is doing?

Question: Jason Bazinet - Citi - Analyst : Okay. So you've been consistent about that point for a while. So I went back and looked, and in 2013, you had 1,300 employees focused on journalism. And in 2023, it was 2,700. So I guess I have a question here is, I'm assuming that this isn't a static number that 2,700, is that enough -- this is more sort of iterative or the more success you have, the more you invest, is that the right...

Question: Jason Bazinet - Citi - Analyst : That's helpful.

Question: Jason Bazinet - Citi - Analyst : Understood. This is another sort of investment point, but I think a little bit different and candidly, as someone relatively new to the New York Times, I got a little bit confused. But when I was looking through your financials, in 2019, your product development costs were half the size of sales and marketing. Today, they're of the same size. What in the world is product development cost for a newspaper company.

Question: Jason Bazinet - Citi - Analyst : That makes sense. I'm going to shift gears again on the advertising. On the digital side, I can't prove this, but I would suspect that most of your digital advertising revenue comes from the news product today. But how would you characterize what initiatives you're pursuing both on the bundled side or in the individual services like athletic or even games for that matter.

Question: Jason Bazinet - Citi - Analyst : It's an ad question, but I'm going to shift over to macro. So a lot of investors that I speak with today and even over the last few weeks are just a little bit skittish about macro -- and the things that I think that are making them nervous is we've seen some travel companies sort of come out and say, Oh, we're going to have softer numbers -- seeing something like low in retail, but to be candid with you, most of the sort of traditional media companies aren't sounding the alarm bells. And so it's -- I think it's a little bit of a confusing period that we're right now I don't know if you have any thoughts on the...

Question: Jason Bazinet - Citi - Analyst : Okay. I want to go back to what you said about visibility. When you said low visibility, that's just endemic to that revenue stream, not a comment you're making about this particular moment in time.

Question: Jason Bazinet - Citi - Analyst : Understood. Shifting gears. Uses of free cash flow. So you guys have no debt. It's amazing. You generate a lot of free cash flow. You returned about, I think, half of it, either in the form of dividends or buybacks. You've also said you have a very high bar for M&A. Is there anything else you can add to that? I mean, it's sort of...

Question: Jason Bazinet - Citi - Analyst : So I have two last questions. And these might be a little bit far afield, but they seem interesting to me, so I'm going to ask them. The first is it seems like a relatively recent phenomena are some of the marquee riders that people know by name, Matt Taibbi, Glenn Greenwald, Tucker Carlson, are sort of unplugging from sort of traditional media and just going out and hanging out their shingle and doing their own thing. Does that matter to you if that trend continues? Is it not meaningful? Is it existential, like where does it sit on your continuum of importance?

Question: Jason Bazinet - Citi - Analyst : Okay. Here's my last question. You have a minute and half to answer. In 2023, in your filings, you purchased or used, I don't know which one it is, 59,000 tons of newsprint. The interesting thing is that's half of what it was 10 years prior. And so my question is, if 10 years from now, there isn't a print version of The New York Times, what does that mean? Is that an unalloyed good for shareholders? Does it not matter and it will just be this, but a gradual transition and just disappears?

Question: Jason Bazinet - Citi - Analyst : Fantastic. Meredith, thank you for your time.