New York Times Company (The)

Good morning and welcome to the New York Times Company's third quarter 2020 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Harlan Toplitsky, Vice President, Investor Relations. Please go ahead.

Thank you and welcome to the New York Times Company's third quarter 2020 earnings conference call. On the call today, we have Meredith Kopit Levien, President and Chief Executive Officer, and Roland Caputo, Executive Vice President and Chief Financial Officer. Before we begin, I would like to remind you that management will make forward-looking statements during the course of this call, and our actual results could differ materially. Some of the risks and uncertainties that could impact our business are included in our 2019 10-K, as updated in subsequent quarterly reports on Form 10-Q. In addition, our presentation will include non-GAAP financial measures, and we have provided reconciliation to the most comparable GAAP measures In our earnings press release, which is available on our website at investors.nytco.com. With that, I will turn the call over to Meredith Kopit Levien.

Thank you, Harlan, and good morning, everyone. As I said when I was named CEO in July, it's the honor of a lifetime to lead the New York Times Company and to support the work of our extraordinary newsrooms. Let me start by thanking our shareholders and the investor community for their confidence as we continue to evolve from a legacy print newspaper business into a growing subscription-first digital enterprise. I assumed my new role in the same quarter that our digital-only subscription revenue overtook print subscription revenue for the first time. Digital subscriptions are now not just the company's fastest growing and most important revenue stream, but also well on the way to becoming our largest. That's a milestone many years in the making and a testament to the enduring nature of our strategy. Since this is the first conversation I'm leading with you, I'm going to take a few minutes to reiterate our strategy and to share my view of our long-term opportunity. I'll also try and put that all in the context of this historic news moment. Now, you've heard us talk for some time about an addressable market of 100 million curious people worldwide who are likely to pay for the type of English language journalism The Times produces. We increasingly believe the market is at least that large. There are nearly a billion people around the world who read news digitally and more than 80 million who pay for news today. It's easy to assume that more will do so in the future as people get more comfortable paying for digital subscriptions generally and as the supply of advertising-first alternatives continues to face pressure. So we're confident that the market is there and also in our ability to penetrate a large portion of it. Our model creates a virtuous cycle, a large newsroom made up of the world's best journalists, A widely recognized and trusted brand and a differentiated digital product enable us to attract and retain more subscribers. The larger our subscriber base becomes, the more we can invest in our journalism and standalone products, and the more we can spread our fixed costs across a wider base of users. That means strong unit economics that improve as we scale with further contributions from advertising, Licensing and affiliate fees. Now, given that we're in the midst of a historic and thus far inconclusive election, I want to talk for a few minutes about our journalism and how its differential value fuels our strategy. Let me first say how proud I am of our newsroom and of the manner in which they're covering this election. They've reported deeply on the candidates, chronicled the key issues facing the country, illuminated the views and experiences of voters, And they're tracking the race itself. If you spent the last few days immersed in our app, you're not alone. Yesterday, our coverage brought 120 million readers to the Times, and more than 75 million came the day before. And they're coming not just to read, but also to experience live coverage in text, multimedia, interactive graphics, and audio. At the same time that we have reporters covering the election on the ground across the country, we've deployed a vast number of journalists to also report on the still-surging pandemic. That effort continues to yield one of the most comprehensive datasets available to understand the virus's spread, and in particular, its exacerbation of underlying inequalities. And while much of the world's attention remains focused on politics and the pandemic, the Times has worked to keep other important issues in the public consciousness from hunger in America, which made up the entirety of a recent issue of our Sunday magazine, to the ongoing conflict between our media and Azerbaijan. This journalistic range plays an important role in our business, which brings me to one of the biggest questions I hear from many of you. What do we believe happens to the business if or when the news cycle changes? First, let me say it's hard to imagine that we're entering a quieter period for news anytime soon, nor do we expect a change of pace in the fundamental issues that demand understanding from technology reshaping our lives to racial and wealth inequality to the rise of China and the effects of climate change.