Q1 Earnings Indicate Potential and Growth Areas for Publishers

Factors contributing to Q1 2024 revenue growth for publishers:

• Digital Advertising Growth: Publishers saw an increase in digital advertising revenue, with Gannett, Dow Jones, and The New York Times reporting growth in this area.
• Digital Subscriptions Revenue: For Gannett, Dow Jones, and The New York Times, revenue from digital subscriptions also fared well, indicating a strong subscriber base and growth in digital-only subscriptions.
• Licensing and Commerce Revenue: Dotdash Meredith experienced growth in licensing and commerce revenue, which contributed to their overall revenue increase.
• Programmatic Advertising: Both BuzzFeed and Dotdash Meredith highlighted strength in programmatic advertising, despite BuzzFeed's overall decline in advertising revenue.

These factors, combined with the optimism expressed by media leaders about their ability to continue revenue increases, suggest a positive trend in the media industry's financial performance for the first quarter of 2024.

BuzzFeed's Optimism Despite Revenue Decline:

BuzzFeed is optimistic about leveraging its existing retailer relationships to tap into the growing retail media network market. Despite a 9% decline in commerce and other revenue in Q1 2024, CEO Jonah Peretti believes that BuzzFeed can capitalize on its established partnerships with retailers to sell ad units off-site. The company aims to capture rich first-party data from its commerce content, which shows what consumers are responding to. This strategy is expected to help BuzzFeed recoup some of its lost revenue in the coming quarters.

Impact of Digital-Only Subscriptions on Revenue:

• The New York Times: The addition of 210,000 net new digital-only subscribers contributed to a total of 9.9 million, with significant growth led by bundle and multi-product subscribers. Digital-only subscription revenue increased by about 13% to $293 million, and average revenue per user (ARPU) grew by 1.9% year over year.

• Dow Jones: Digital-only subscriptions to The Wall Street Journal grew by 13% year over year, surpassing 3.7 million subscriptions. Subscribers to more than one Dow Jones subscription product accounted for a significant portion of the incremental digital-only volume growth.

• Gannett: The digital-only subscription base exceeded 2 million, with digital-only subscription revenues up 21.3% year over year to $43.5 million. ARPU for digital-only subscribers also saw a substantial increase.

These figures indicate that digital-only subscriptions are a vital source of revenue for publishers and are contributing to their overall financial health.

Outlook for Digital Advertising Revenues in Q2 2024:

• BuzzFeed: Despite facing ongoing pressure on direct sales channels and lower third-party platform monetization, BuzzFeed expects programmatic advertising revenue to return to modest year-over-year growth in Q2.

• Dotdash Meredith (DDM): DDM anticipates 10-plus percent total revenue growth each quarter for the remainder of the year, signaling a positive outlook for digital advertising revenues.

• Gannett: The company is expected to see a decrease in total revenue for the full year of 2024, but specific projections for digital advertising revenues are not detailed.

• The New York Times: The publisher expects total subscription revenue to increase 6-8% year over year in Q2, with digital-only subscription revenue projected to increase 11-14% year over year. Advertising revenues are expected to grow as well, with total ad revenues increasing by a 'low single digits' percentage and digital advertising revenues by a 'high single digits' percentage.

These projections suggest a cautiously optimistic view of the digital advertising market for publishers in the upcoming quarter.

Publishers' Hesitance to Embrace TikTok Shop:

Publishers have seen success with branded content on TikTok, but they remain cautious about investing heavily in TikTok Shop. Reasons for this hesitance include:

• Limited Sales: Some publishers, like the Daily Mail, have experimented with TikTok Shop but have not seen significant sales take off.

• Affiliate Revenue: Gallery Media Group has found that affiliate revenue is mostly coming from Amazon through links on product review videos rather than TikTok Shop.

• Marketplace Development: Publishers like Gallery Media Group are waiting for TikTok to integrate more brands and products into TikTok Shop to become more competitive.

• Focus on Content Creation: Companies like BDG are concentrating on creating short-form video content to market and sell a brand's products, rather than selling the products themselves.

These factors indicate that while TikTok Shop has potential, publishers are looking for more development and proven success before fully committing resources to the platform.