New York Times Eyes Ambitious Overhaul InQuest For 'Journalistic Dominance'
February 4 12:00 PM
NYT executive editor Dean Baquet says thepaper needs to figure out how to apply its "timeless values to a newage."
NEW YORK -- The New York Times, at age 164,has kept pace with today's media upstarts while remaining committed tohigh-quality journalism. The company admitted?its innovation
shortcomingsa couple years back, but these days the newsroom is rife with experimentation in things like visual storytelling, podcasting,reader engagement and?virtual reality.
Now, executive editor Dean Baquet toldstaff Tuesday, "it is time to catch our breath and come up with a sharedvision for what our report, and ultimately the New York Times newsroom, shouldlook like in the coming years."
In a memo, Baquet said he will work withtop masthead editors to examine the
newsroom's structureand that he has tapped David Leonhardt to help leadthe effort. Leonhardt, a prominent economics writer and founding editor of TheUpshot, wasrecently nameda columnist, but now the start of that column will be delayed until the summer.
Baquet
applauded his staff's recent innovation efforts,but stressed that it's important to figure out what's working and what
isn't in order to determine the best course forward.
"Experimenting with new forms ofjournalism and presentation has sparked tremendous creativity in thenewsroom," he wrote. "But in trying to balance the new and the old,reporters and editors are sometimes left exhausted and confused.Simply put, we keep turning things on
-- greater visual journalism, live news blogs, faster enterprise, podcasting,
racing against an ever-growing list of new competitors on an expanding list of
stories – without ever turning things off."
"We need to develop a strategic planfor what The New York Times should be, and determine how to apply our timelessvalues to a new age," Baquet added.
In the memo, Baquet discussed how the Timescurrently determines which stories should warrant the paper's full arsenal ofdigital, print and visual resources and whether the current desk structure --Metro, National, International and others -- is best way to tackle big storieslike climate change and education. He posed a number of questions which,presumably, he and others involved will hope to answer in the coming months.
"We deeply value the craft of editing,but in thedigital era should we continue to edit every update of every story at the samelevel?" he asked.
"How much of our coverage isduplicative because we have never resolved overlapping jurisdictions? Whichparts of our newsroom have not grown quickly enough? How will the newsroomchange as it becomes more internationally focused?"
This deep,
structural examination could lead to some cuts.
The Times has bucked the trend among legacy newspaper companies by?maintaining??robust,??1,300-person newsroom-- even after several rounds of layoffsand buyouts. Banquet?recently told?public editor Margaret Sullivanthat "given the reality of the journalism world we’re in, we certainly can’t get any bigger and we probably have to get a little smaller."
In Tuesday's memo, Baquet wrote that the breadth and depth of the staff is "the bedrock of our mission and our business," but acknowledged that the company "has to look for judicious savings everywhere, and that includes the newsroom."
Still, he wrote, "instead of cuts andadditions without a clear picture of where we are headed, we want to approachthe task thoughtfully, with our mission and values clearly in mind."
"Everything we do must either be partof that mission or helpgenerate
the revenue to sustain our journalistic dominance," he continued."We must turn some things off, and build up the areas that set us apart.We must cast a fresh eye on our coverage to determine whether some of itreflects old habits rather than the urgent goal of telling our readers whatthey most need to know.
Read Baquet's full memo below:
To the newsroom:
We accomplished so much in the past year.
Our stories had huge impact on the world.The power of the richest campaign donors is being ferociously debated becauseof our political coverage. The military is investigating whether Navy SEALsplayed a role in the death of an Afghan civilian. Our series on secret realestate deals has led to significant changes in disclosure rules. Our exposes ofNew York’s dysfunctional prisons have set the agenda. And our coverage ofAmazon forced a searing discussion about the modern workplace.
Our magazines continue to produce powerfulstorytelling on beautiful pages. Our forays into virtual reality and podcastingshow we can succeed at new ventures while maintaining our values. We’ve broughta new generation of critics into our Culture report.
In ways large and small, the newsroom isexperimenting and adapting as we move into our digital future. We are revampingour video unit. The news hub is beginning to free desks to focus on coveragewithout being consumed by print deadlines. We have begun a desk-by-desk digitaltraining regimen. We have gone from being largely unaware of our audience’schanging habits to making them an integral part of our daily conversations. Inour news meetings we talk ofcoverage, regardless of platform. More and more wediscuss how to highlight all kinds of stories -- video, multimedia, thepolitics desk’s great voices feature -- that are more digital than print. Wedebate openly and freely as we experiment with new ways of telling stories. Theconversational writing of the Upshot is making its way into the rest of ourcoverage.
Our stellar coverage of the Paris attacksprovided a powerful illustration of a transformed newsroom, one that uses everytool – old and new – to cover a giant story.
Readers notice. Our subscriber basecontinues to grow at an astounding pace, now over two million in 193 countries.Our audience has never been larger. Our readers show they value our work bypaying good money for it, in print and online. They also give us something evenmore valuable: their time. They linger on our best work, reading longnarratives and engaging with beautiful interactives.
Experimenting with new forms of journalismand presentation has sparked tremendous creativity in the newsroom. But intrying to balance the new and the old, reporters and editors are sometimes leftexhausted and confused. Simply put, we keep turning things on -- greater visualjournalism, live news blogs, faster enterprise, podcasting, racing against anever-growing list of new competitors on an expanding list of stories – withoutever turning things off.
It is time to catch our breath and come upwith a shared vision for what our report, and ultimately the New York Timesnewsroom, should look like in the coming years. Working with the top mastheadeditors – Matt, Susan, Janet, Tom and Kinsey -- I will be leading an effortthis year to think through how the newsroom should continue on its path tochange.
I’ve asked David Leonhardt to help me carryout this examination across the newsroom. His experience creating and leadingthe Upshot has taught him to ask provocative questions about how we do businessand how we serve readers. Andy has generously agreed to let David delay thestart of his new column until the summer. And Andy himself will be a keyparticipant in our discussions.
We need to develop a strategic plan forwhat The New York Times should be, and determine how to apply our timelessvalues to a new age. What breaking stories demand even more of our attention,and which ones are not quite important enough to warrant our full digital,print and visual resources? Does our system of powerful desks help us cover bigstories that don’t easily have a home --- like climate change and education ---or does it sometimes get in the way? We deeply value the craft of editing, butin the digital era should we continue to edit every update of every story atthe same level?
How much of our coverage is duplicativebecause we have never resolved overlapping jurisdictions? Which parts of ournewsroom have not grown quickly enough? How will the newsroom change as itbecomes more internationally focused?
We are not starting from scratch. We havespent the last couple of years wrestling with these questions in various partsof the newsroom. By way of example, Joe Kahn and his colleagues onInternational have been working to create a truly global digital news operationthat greatly expands our audience throughout the world.
Of course cost is a factor in thisexercise. The business is changing. Although our digital revenue is growingstrongly, we continue to feel the impact of declines in parts of our printbusiness. That means the company must continue to carefully manage its costs.
Our newsroom today is larger than it hasever been. Everyone – from the top of the company down – believes thatmaintaining the country’s most robust and powerful newsroom is essential. Thestrength of our newsroom is not just the bedrock of our mission and ourbusiness, but it also differentiates us from our competitors. But the simplefact is that to secure economic success and the viability of our journalism inthe long term, the company has to look for judicious savings everywhere, andthat includes the newsroom.
Instead of cuts and additions without aclear picture of where we are headed, we want to approach the taskthoughtfully, with our mission and values clearly in mind. Everything we domust either be part of that mission or help generate the revenue to sustain ourjournalistic dominance. We must turn some things off, and build up the areasthat set us apart. We must cast a fresh eye on our coverage to determinewhether some of it reflects old habits rather than the urgent goal of tellingour readers what they most need to know.
I also want to be clear that I believe TheTimes of the future can and should be even better than The Times of today. Wewant to continue to build on our tradition of innovation. We want to free upour best journalists to be even more nimble, dynamic and innovative in coveringthe biggest breaking news. We want to show even greater expertise in coveringthe pivotal subjects that matter most to our readers and to the world – notonly government and politics and business and national security, but alsoculture and science and fashion and sports. We want to understand our readers,without becoming enslaved to metrics. We want to remain the newsroom whereother journalists aspire to work. We want to build the premier global newsoperation. And we want to enhance our status as the premier visual newsorganization, and lead the journalism world in narrative and investigativereporting.
Anyone who compares today’s version of TheTimes to a version from the good old days quickly sees how much strongertoday’s is. My goal is to ensure that our successors will edit a report that isbetter yet.
I recently spent two full days with theleaders of the Times Company, including Arthur, Mark, Michael, Andy and othermembers of the executive team. The subject was our future, and the company’sambitious goal of doubling digital revenue in five years.
It was a remarkable discussion. I came awaywith the deep understanding that the reason we will survive and thrive is thateveryone is committed to preserving The Times as a great and large newsorganization. To a degree that is astonishing in modern business, theOchs-Sulzberger family has demonstrated its ongoing commitment over manydecades. Like all of us, they believe profoundly that the future of The NewYork Times lies in its being the finest news organization in the world.
Dean
資料：紐約時(shí)報(bào)2015年四季報(bào)及年報(bào)電話說明會(huì)紀(jì)要
Feb.?4,?2016?4:29?PM?ET|?About:New?York?Times?Co.?(NYT)
Operator
Good?morning.?My?name?is?Mike,?and?I?will?be?your?conference?operator?today.?At?this?time,?I?would?like?to?welcome,?everyone,?toThe?New?York?Times?Company?Q4?and?Full?Year?2015?Conference?Call.?All?lines?have?been?placed?on?mute?to?prevent?any?background?noise.?After?the?speakers'?remarks,?there?will?be?a?question-and-answer?session.?Thank?you.
I?will?now?turn?the?call?over?to?Harlan?Toplitzky,?Executive?Director?of?Financial?Planning?and?Analysis.?You?may?begin?your?conference.
Harlan?Toplitzky?-?Executive?Director?of?Financial?Planning?&?Analysis
Thank?you,?and?welcome?to?The?New?York?Times?Company's?fourth?quarter?and?full-year?2015?earnings?conference?call.?On?the?call?today,?we?have?Mark?Thompson,?President?and?Chief?Executive?Officer;?Jim?Follo,?Executive?Vice?President?and?Chief?Financial?Officer;?and?Meredith?Kopit?Levien,?Executive?Vice?President?and?Chief?Revenue?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?2014?10-K.?In?addition,?our?presentation?will?include?non-GAAP?financial?measures?and?we?have?provided?reconciliations?to?the?most?comparable?GAAP?measures?in?our?earnings?press?release,?which?is?available?on?our?website?at?investors.nytco.com.
With?that,?I?turn?the?call?over?to?Mark?Thompson.
Mark?J.?T.?Thompson?-?President,?Chief?Executive?Officer?&?Director
Thanks,?Harlan,?and?good?morning,?everyone.?Well,?as?you?can?see?from?the?results?we?released?this?morning,?we?had?a?strong?quarter?and?an?encouraging?2015,?andwe?begin?2016?with?high?hopes?for?the?future.
Let?me?deal?first?with?the?quarter,?briefly?review?the?past?year?as?a?whole,?and?then?turn?to?2016?and?beyond.
In?Q4?2015,?we?saw?adjusted?operating?profit?of?$118?million,?a?13%?increase?versus?the?prior?year,driven?by?solid?growth?in?digital?advertisingand?consumer?revenues,?as?well?as?good?cost?management.
We?had?another?quarter?of?strong?net?gains?in?digital-only?subscriber?numbers,?with?an?additional?net?53,000?subscribers.?It?was?the?biggest?quarterly?addition?for?three?years?and?represented?a?20%?growth?in?subscriber?numbers,?compared?with?the?same?quarter?in?2014.
Continued?improvement?in?retention?and?growth?of?international?subscribers?and?the?success?of?target?pricing?to?specific?market?segments,?like?college?students,?all?helped?us?to?maintain?momentum.?We?believeour?digital-pay?model?has?great?potentialand?that?is?being?born?out?in?the?acceleration?we're?seeingin?our?year-over-year?subscriber?growth?numbers,?as?well?as?the?related?revenue?growth.
In?our?last?earnings?call,?we?predicted?a?return?to?revenue?growth?for?digital?advertising?in?the?fourth?quarter?and?we?achieved?that.?Indeed,?we?did?somewhat?better?than?we?predicted,?posting?an?11%?year-over-year?digital?advertising?revenue?increase?in?Q4.
Rapid?growth?in?mobile?ad?revenue?was?an?important?factor,?as?well?as?intense?demand?for?the?production?and?distribution?of?branded?content.
Important?also?was?the?November?launch?of?the?New?York?Times?VR?app,?not?to?mention?the?distribution?of?more?than?1?million?Google?Cardboard,?virtual?reality?viewing?devices?to?our?subscribers.
Total?revenues?for?the?quarter?were?flat?at?$445?million?with?strong?digital?performance,offsetting?a?moderate?print?advertising?decline,as?well?as?a?slight?decline?in?print?circulation?revenue.Significant?costs?control?also?accounts?for?the?substantial?increase?in?profitability.
Let?me?now?consider?2015?as?a?whole.In?the?fall,?we?published?our?path?forward,?a?short?statement?of?our?strategic?ambitions?for?the?coming?years.Central?to?those?ambitions?is?our?determination?to?double?our?pure-play?digital?revenue?over?the?next?five?years.And?it?was?very?encouraging?to?see?tangible?steps?towards?that?target?in?2015.?During?the?summer,?we?passed?the?1?million?digital-only?subscriber?mark?and?we?ended?2015?with?1.1?million?digital?subscribers.?We?expect?to?end?2016?with?more?than?a?million?and?a?quarter?digital-only?subscribers.
The?digital?advertising?market?is?undergoing?profound?change?and?we're?not?immune?to?its?volatility,?but?we?believe?that?our?strategic?approach?to?rapidly?build?out?new?high-value?propositions?for?marketers?in?branded?content,?mobile,?video?and?VR?is?paying?off,?with?strong?growth?in?three?out?of?four?quarters.?We?will?continue?to?invest?in?advanced?storing?technology?and?talent?in?mobile?ad?innovation?and?in?a?broad?range?of?services?to?help?advertisers?reach?their?target?audiences?on?our?own?assets?and?also?across?other?platforms.
T?Brand?Studiois?a?particular?success?story?with?no?fewer?than?120?campaigns?launched?for?70?advertisers?since?we?started?the?business?in?January?2014,?just?two?years?ago.?We?don't?expect?digital?advertising?revenue?growth?associated?with?these?new?growth?areas?to?be?even?across?the?year.?But?we?are?confident?that?we?have?the?talent?and?the?drivers?in?place?to?make?2016?a?year?of?strong?digital?advertising?growth.
Print?advertising?continues?to?vary?unexpectedly?month-to-month,?but?the?significant?pause?we?saw?in?the?first?half?of?the?year?moderated?somewhat?in?the?second?half.?As?you?will?hear,?so?far?at?least,?that?more?moderate?picture?is?extending?into?early?2016.
Print?circulation?revenue?followed?a?more?predictable?pattern?with?home?delivery?price?increases?compensating?for?most,?but?not?quite?all?of?the?volume?declines?both?in?home?delivery?and?single-copy?sales.?Adjusted?operating?profit?for?the?year?was?up?to?$289?million,?compared?to?$256?million?for?2014?due?to?lower?costs?and?strong?digital?revenue?growth.
I?might?add?that?2015?was?a?very?strong?year?for?Times'?journalism?with?exceptional?work?in?international?news,?where?our?continued?investment?in?global?news?gathering?enabled?us?to?cover?stories?like?the?refugee?crisis?and?the?Paris?attacks?with?more?depth?and?focus?than?any?other?news?provider,?as?well?as?investigations?and?features.
I?think?it's?also?worth?noting?the?exceptional?and?innovative?coverage?of?Tuesday's?Iowa?caucuses.?We?saw?traffic?totals?in?the?top?1%?of?all?traffic?days?in?the?history?of?The?New?York?Times?and?very?high?levels?of?engagement,?including?the?highest?number?of?readers?we've?ever?had?on?a?live?blog?during?the?24-hour?period.?The?presentation?of?the?story?on?smartphone?complete?with?animating?infographics?broke?new?ground.
So,?what?are?our?plans?for?2016?Our?path?forward?calls?for?us?to?reach?out?to?new?audiences?at?home?and?abroad,?to?substantially?grow?the?number?of?the?most?engaged?users,?to?further?grow?both?our?digital?circulation?and?advertising?businesses,?to?develop?our?mobile?video?and?branded?content?businesses,?and?to?exploit?other?B2B?and?B2C?opportunities.
Over?the?course?of?2016,?therefore,?we?expect?to?invest?judiciously?in?growth,?to?develop?content?for?targeted?international?audiences?and?to?market?the?Times?more?effectively?to?them,to?grow?our?multimedia?capabilities?in?video,?VR?and?audio,?to?further?build?out?T?Brand?Studio,and?to?extend?the?package?of?services?we?offer?our?advertising?partners,?as?well?as?other?initiatives.
But?one?of?our?achievements?in?recent?years?has?been?to?combine?investment?in?digital?growth?with?a?tight?grip?on?costs,?and?we're?still?determined?to?focus?on?both.Over?the?coming?months,?we?will?take?a?close?look?at?our?existing?cost?base,even?as?we?make?targeted?investments?in?our?digital?future.?We?know?that?success?was?dependent?on?the?quality?of?journalism?we?offer?our?users?here?and?around?the?world,?and?we?must?maintain?that?quality.
Nonetheless,?we?believe?that?alongside?investment?in?our?newsroom?and?elsewhere,?there?is?scope?for?further?structural?savings?across?our?cost?base.
Deep?into?its?digital?transition,?The?New?York?Times?Company,?unlike?many?of?its?rivals,?remains?a?very?profitable?companyand?we're?determined?to?grow?that?profitability?just?as?we?did?in?2015.?Although?in?2016?we?expect?our?investment?in?digital?will?put?downward?pressure?on?operating?profit,?we?are?committed?to?returning?to?operating?profit?growth?as?soon?as?we?can.
In?summary,?I?see?2016?as?an?investment?year,?building?on?our?strategy?and?some?of?the?key?successes?of?2015.?I?see?it?as?a?year?of?continued?transformation?of?the?business?to?meet?the?changing?needs?of?our?customers?and?a?changing?market.?And?I?see?it?as?a?year?in?which?we?take?the?necessary?steps?both?to?double?our?digital?revenue?over?the?next?five?years?and?to?grow?the?company's?profitability?in?the?long-term.
But?now,?let?me?hand?over?to?Jim.
James?M.?Follo?-?Chief?Financial?Officer?&?Executive?Vice?President
Thank?you,?Mark,?and?good?morning,?everyone.?As?Mark?said,?we?closed?2015?with?a?solid?fourth?quarter,?highlighted?by?strong?growth?in?profitability,?driven?by?solid?digital?consumer?and?advertising?performance?and?good?cost?control.
Adjusted?operating?profit?rose?13%?in?the?quarter,?to?$118?million?and?adjusted?diluted?earnings?per?share?was?$0.37?in?the?fourth?quarter,?compared?to?$0.26?in?the?prior?year.?We?reported?GAAP?operating?profit?of?approximately?$88?million,?compared?to?$62?million?in?the?same?period?of?2014.
Overall,revenues?were?flat?in?the?quarter?with?strong?digital?revenue?growth?offset?by?weakness?in?print?revenues.For?the?full?year,?adjusted?operating?profit?also?grew?13%?to?$289?million,?while?operating?profit?grew?49%?to?$137?million,?on?revenues?that?were?down?less?than?1%,?or?$9?million.
Circulation?revenues?increased?approximately?1%in?the?quarter?with?digital-only?subscription?revenue?growth?more?than?offsetting?print?declines.Digital-only?subscription?revenues?wereapproximately?$50?million?in?the?quarter,an?increase?of?13%?from?the?same?quarter?in?2014.
On?the?print?circulation?side,?we?benefited?fromJanuary?2015's?home?delivery?price?increase,although?higher?revenue?associated?with?the?new?rates?was?outweighed?by?overall?print?volume?declines.?The?print?decline?was?driven?by?lower?single-copy?revenues.
We?again?implemented?a?home?delivery?price?increase?at?the?beginning?of?the?first?quarter?of?2016?at?a?rate?similar?to?recent?annual?price?increases.
Advertising?revenues?were?down?1%?in?the?quarter?with?digital?revenue?growing?11%?and?print?advertising?declining?7%.
The?digital?advertising?performance?was?particularly?encouraging,?given?the?tough?year-over year?comparisons,?where?digital?advertising?grew?19%?in?the?fourth?quarter?of?2014.
Digital?advertising?reflected?strong?growth?in?mobile,?branded?content?and?creative?services?revenue.
Revenues?from?our?initial?slate?of?VR?films?in?the?quarter?also?contributed?to?growth.
Mobile?revenues?continued?to?grow?at?a?rapid?rate?versus?2014,?up?72%?in?Q4?and?58%?for?the?full-year?and?represented?approximately?22%?of?total?digital?advertising?revenues?in?the?quarter.
The?lower?print?advertising?revenue?was?due?to?declines?in?the?New?York?Times?and?more?significant?declines?in?the?International?New?York?Times.
In?the?New?York?Times,?luxury,?media,?travel,?real?estate,?and?home?furnishing?categories?all?performed?well?in?the?quarter.?While?entertainment,?financial,?technology,?and?telecom?advertising?were?weak.?The?decline?in?the?International?New?York?Times?was?mainly?driven?by?a?decline?in?the?luxury?category,?and?foreign?currency?exchange?rates?also?played?a?part?in?that?decline.
As?usual,?we?experienced?significant?month-to-month?volatility?in?advertising?revenues.Our?quarterly?performance?strengthened?as?the?quarter?progressed?as?illustrated?by?the?fact?that?overall?advertising?wasdown?9%?in?October,?flat?in?November?and?up?7%?in?December.
And?finally?on?the?revenue?side,?our?revenues?are?flat?in?the?quarter.?That?category?includes?NYT?Live,?which?is?our?live?events?business,?our?Crossword?product,?building?rental?income,?digital?archives?and?others.Digital?archives?and?building?rental?income?grew?in?the?quarter?but?were?offset?by?declines?in?NYT?Live?and?our?retail?store.?The?decline?in?NYT?Live?was?in?part?due?to?the?postponement?of?our?luxury?conference?in?Paris.
Operating?costs?decreased?again?in?the?fourth?quarter?by?nearly?$30?million?overall,
while?adjusted?operating?costs?declined?$14?million,?or?4%.?Operating?costs?decline?in?the?quartermainly?due?to?print?production?and?distribution?efficiencies,?declines?in?severance,?depreciation,?amortization?and?raw?material?costs,as?well?as?lower?marketing?and?promotion,benefits?and?non-operating?retirement?costs.
Our?focus?on?reducing?legacy?cost?remains?a?top?priority,?while?at?the?same?time?we'll?continue?to?invest?in?growing?our?digital?revenues.
Our?non－operating?retirement?costs?were?down?in?the?quarter?to?$7.5?million?from?$11.2?million?in?the?prior?year?due?to?both?lower?pension?interest?expense?and?retiree?medical?costs.
Moving?to?the?balance?sheet,?our?cash?and?marketable?securities?balances?was?$905?million,?and?our?total?cash?position?exceeds?debt?and?capital?lease?obligations?by?approximately?$473?million.?While?our?qualified?pension?obligations?declined?at?year?end,?due?to?a?rise?in?discount?rates?from?prior?year,?plan?asset?performance?trailed?our?expectations.?Thus?our?unfunded?qualified?pension?obligations?ended?the?year?roughly?flat?with?the?prior?year?at?$273?million.
The?company?has?repurchased?approximately?$6.5?million?Class?A?shares?for?$83?million?to?date?as?of?February?2,?under?our?previously?announced?$101?million?share?repurchase?authorization.
And?let?me?conclude?with?our?outlook?for?the?first?quarter?of?2016.
Circulation?revenues?are?expected?to?increase?at?a?rate?similar?to?the?fourth?quarter?trend,?driven?by?the?benefit?of?our?digital?subscription?revenue?growth,?partially?offset?by?lower?print?circulation?revenues.
Despite?the?impact?of?the?home?delivery?price?increase.?We?expect?the?total?number?of?net?digital?subscription?additions?to?be?about?50,000?in?the?first?quarter.
Overall,advertising?revenues?are?expected?to?be?down?between?2%?and?4%?with?digital?advertising?revenue?growing?in?the?mid-single?digits.?Other?revenues?are?expected?to?increase?approximately?10%,?and
first?quarter?operating?costs?and?adjusted?operating?costs?are?expected?to?increase?in?the?low-single?digits.Due?primarily?to?a?change?we're?making?in?calculating?interest?costs?on?our?legacy?pension?obligations.?We?expect?non-operating?retirement?costs?to?decline?by?about?$4?million?in?the?first?quarter?to?$5?million.
And?as?Mark?stated?in?his?remarks,?as?we?look?out?for?the?full?year,we?expect?adjusted?operating?costs?will?increase?in?the?low?to?mid-single?digits,?as?we?invest?in?certain?areas?of?the?business?that?we?believe?we?can?grow?over?time.?We'll?continue?to?maintain?the?strong?cost?discipline?that?we've?exhibited?in?the?past,?but?are?willing?to?invest?in?areas?of?growth.
And?with?that,?we'd?like?to?open?it?up?for?questions.
Question-and-Answer?Session
Operator
Your?first?question?is?from?William?Bird?from?FBR?Capital?Markets.
William?Bird?-?FBR?Capital?Markets?&?Co.
Good?morning.?Mark,?I?was?wondering?if?you?could?talk?a?bit?aboutwhere?you're?focusing?your?digital?investments?in?2016.And?maybe,?if?you?could?talk?specifically?about?what?you're?doing?in?the?areas?of?digital?video?and?marketer?insights??Thank?you.
Mark?J.?T.?Thompson?-?President,?Chief?Executive?Officer?&?Director
Good?morning,?Bill.?I?don't?want?to?add?much?to?what?I?said?in?my?remarks,?really.?But?I?expect?investment?both?in?as?it?were?conventional?video.?We?have?a?great?new?leader?of?our?video?efforts?in?Alex?MacCallum?at?the?Times.?And?I?expect?to?invest?more?in?conventional?video.We?also?want?to?back?up?the?success?we?had?in?Q4?2015?with?the?launch?of?VR?app?and?the?delivery?of?more?than?a?million?Google?Cardboard?viewersto?our?subscribers?with?more?investment?in?VR?capability.
And?on?the?marketer?side,?I?might?just?hand?over?briefly?to?Meredith,?but?we?believe?we've?got?a?really?rapidly?growing?business?in?T?Brand?Studio,?and?we?think?that?the?range?of?services?that?we?can?offer,?as?you?know,?we're?–?in?T?Brand?Studio?we're?making?content?for?advertising?partners.?We?think?the?range?of?services?we?can?offer?those?partners?could?be?broader?than?it?currently?is?and?we'll?be?investing?in?that.?But,?Meredith,?do?you?want?to?talk?about...
Meredith?Kopit?Levien?-?Executive?Vice?President,?Chief?Revenue?Officer
Sure.
Mark?J.?T.?Thompson?-?President,?Chief?Executive?Officer?&?Director
...about?the?marketer?side.
Meredith?Kopit?Levien?-?Executive?Vice?President,?Chief?Revenue?Officer
Sure.?Good?morning.?I?think?Mark?actually?just?headlined?it?very?well.?I'll?say?we?had?a?very?good?year?inT?Brand?Studio,?and?we're?doing?very?well?in?helping?marketers?develop?the?right?creative.?We're?also?seeing?quite?a?bit?of?demand?for?distribution?of?that?creative,?and?we're?building?out?our?portfolio?services?to?be?able?to?help?them?do?that.
We're?building?out?our?sort?of?capability?and?expertise?at?making?the?branded?content?at?the?point?of?discovery?richer?and?more?compelling,?and?I?would?say?we're?going?to?keep?investing?in?people?and?technology?capabilities?around?sort?of?advanced?storytelling?formats.?So,?VR?is?one?of?them,?but?there?are?many?others.
William?Bird?-?FBR?Capital?Markets?&?Co.
And?separately,?could?you?talk?about?your?current?perspective?on?your?plans?for?utilizing?your?growing?cash?balance??Thank?you.
Mark?J.?T.?Thompson?-?President,?Chief?Executive?Officer?&?Director
Jim,?do?you?want?to?tackle?that?
James?M.?Follo?-?Chief?Financial?Officer?&?Executive?Vice?President
Yeah.?I?will.?Bill,?we're?still?executing?under?our?share?authorization?program.?And?as?I've?said,?we're?probably?a?little?bit?more?than?$80?million?into?that.?So,?we'll?continue?to?evaluate?that?but?we?did?say,?when?we?put?that?in?place,?we?said?that?was?kind?of?a?one-off?issue,?where?we?would?be?essentially?offsetting?the?dilution?from?a?warrant?exercised?earlier?partly,?but?we'll?continue?to?explore?that.?We'll?continue?to?be?mindful?of?our?pension?obligations?as?well,?and?I?hope?to?give?you?an?update?on?that?as?well,?those?issues?we?hope?to?take?care?of?themselves,?through?interest?rate.?That?doesn't?really?happening?at?least?in?the?short?term.?We?feel?reasonably?good?about?where?we?are?from?a?dividend?point?of?view?and?the?amount?of?cash?that?we?generate?annually?being?paid?out?in?a?form?of?dividend.
So,?we'll?continue?to?watch?it,?but?right?now?we?feel?like?the?balance?sheet?is?a?good?place.?It?gives?us?a?lot?of?flexibility?to?be?able?to?invest?where?we?need?to.?But?that?will?change?over?time.?Obviously,?pension?obligations,?we?hope?will?settle?themselves?and?that?might?free?up?some?of?our?thinking?there.?But?right?now,?we?feel?pretty?good?where?we?sit?from?the?balance?sheet?point?of?view.
William?Bird?-?FBR?Capital?Markets?&?Co.
Thank?you.
Operator
Your?next?question?is?from?Alexia?Quadrani?from?JPMorgan.
Alexia?S.?Quadrani?-?JPMorgan?Securities?LLC
Thank?you.?If?I?could?just?dig?in?a?little?bit?further?on?the?advertising?trends,?I?know?it's?always?very?volatile?and?we?shouldn't?maybe?read?too?much?into?it,?but?it?does?look?like?trends?have?been?better?both?in?print?and?in?digital?in?the?recent?quarters.?I?guess?are?there?any?changes?that?you're?seeing?ahead??I?mean,could?we?be?bumping?up?close?to?the?bottom?maybe?on?the?print?side?
And?on?the?digital?side,?I?know?you?had?a?lot?of?internal?changes,?which?clearly?are?having?some?positive?results?there.?Can?those?be?–?can?we?see?incremental?growth,?I?guess,?still?coming?from?those?changes?ahead?on?the?digital?side?
Meredith?Kopit?Levien?-?Executive?Vice?President,?Chief?Revenue?Officer
Yeah.?I?mean.?I?think?–?good?morning,?Alexia.?I?think?a?lot?of?what?we?think?is?embedded?at?least?for?the?next?quarter?and?the?guidance?that?Jim?shared.?But,?I'll?say?two?things.
One?is?I?think?–?we?all?think?thatthe?character?of?the?ad?business?is?fundamentally?changing.It?used?to?be?a?business?that?was?highly,?highly?dependent?on?display?and?not?changing.?And?that's?making?for?what?feels?like?more?volatility?or?less?certainties?for?month-to-month.?But?the?business?now?is?much?more?about?branded?content?and?content?services?in?mobile?and?video?and?sort?of?what?I?just?refer?to?as?kind?of?advanced?storytelling.?And?as?a?result,?I?think?that?means?bigger,?more?complex?partnerships?with?marketers?and?often?take?a?while?to?get?up?and?off?the?ground.
So,?all?a?way?of?saying?we?have?a?fair?amount?of?optimism?about?our?continued?growth?in?the?areas?that?we've?been?saying,?we?have?been?growing,?which?are?video,?branded?content,?mobile?and?services?around?branded?content.
Mark?J.?T.?Thompson?-?President,?Chief?Executive?Officer?&?Director
And?if?I?can?just?say?in?particular?one?news?I'm?excited?about?is?the?work?we're?doing?in?mobile.?I?think?the?way?we're?deploying?our?journalism?on?smartphone,?the?stronger?visual?impact?of?what?we're?doing,?the?launch?of?new?ad?units?in?mobile,?some?of?the?numbers?we're?seeing?around?engagement?on?mobile?and?the?straightforward?dramatic?growth?of?mobile?as?a?percentage?of?our?digital?advertising,?all?feels?very?encouraging.?And?that?business?of?–?can?you?begin?to?really?drive?revenue?from?mobile?alongside?the?levels?of?consumption?from?mobile,?I?think?we?made?–?I?would?say?dramatic?gains?across?2015.?And?I?think?we?look?set?fair?for?2016?in?mobile?as?well.
Alexia?S.?Quadrani?-?JPMorgan?Securities?LLC
Okay.?Thank?you.?And?just?one?quick?follow-up,?if?I?may.?I?apologize?if?I?missed?this.?But?the?impressive?growth?in?the?digital?pay?subs?we?saw?in?the?quarter,?was?there?anything?unique?in?the?composition?of?those?new?subscribers?in?terms?of?what?type?of?subscribers?they?were?
Meredith?Kopit?Levien?-?Executive?Vice?President,?Chief?Revenue?Officer
I?think?we're?continuing?to?see?success?where?you've?sort?of?heard?us?talk?about?it?all?year.?So,?education,?individual?subscription,?International?–?International?is?actually?growing?at?a?pretty?fast?clip?–?and?also?B2B.?So,both?education?B2B?and?corporate?subscriptions.
We're?seeing?growth?in?all?of?those?areas?and?we?expect?those?to?be?the?areas?of?growth?for?next?year.?I'll?also?say,?I?think,?we're?retaining?better.?So?some?of?the?new?tactics?we've?deployed?around?retention?are?really?starting?to?take?root?and?you'll?see?that?play?out?across?the?next?few?quarters.
Alexia?S.?Quadrani?-?JPMorgan?Securities?LLC
Thank?you?very?much.
Operator
Your?next?question?is?from?Craig?Huber?from?Huber?Research?Partners.
Craig?Anthony?Huber?-?Huber?Research?Partners?LLC
Yes,?hi.?Thank?you.?I?got?a?few?housekeeping?questions?first,?if?I?could.?Pension,?what?is?your?outlook?here?for?potential?contributions?to?the?pension?this?new?year?
James?M.?Follo?-?Chief?Financial?Officer?&?Executive?Vice?President
Craig,?we?are?well?ahead?of?required?funding,?government-mandated?funding?for?many?years?–?not?many?years,?I?should?say,?several?years.?So?I?think?we?still?hold?that?interest?rates?–?we'll?hold?out?to?see?where?interest?rates?go?over?time.?So?we?don't?see?any?real?immediate?need?to?be?more?aggressive?on?funding.
There?are?some?required?smaller?contributions?that?are?a?result?of?some?contractual?obligations.?Those?are?relatively?small.?And?so?our?outlook?for?the?year?should?be?relatively?small,?but?no?discretionary?contributions,?that's?our?current?posture.
Craig?Anthony?Huber?-?Huber?Research?Partners?LLC
Okay.?Then?also,?I?want?to?ask?you?for?a?daily?and?Sunday?circulation?print?volume,?what?were?those?percentages?changes?in?the?quarter?year-over-year,?please?
Meredith?Kopit?Levien?-?Executive?Vice?President,?Chief?Revenue?Officer
Q4?daily?down?6.9%,?and?Sunday,?4.4%.
Craig?Anthony?Huber?-?Huber?Research?Partners?LLC
Okay.?Thank?you?for?that.?Then?also,?newsprint,新聞?dòng)眉圛'm?curious?what?the?average?percent?change?there?was?for?price?and?also?consumption,?please,?in?the?quarter?
James?M.?Follo?-?Chief?Financial?Officer?&?Executive?Vice?President
I?think?the?total?rawmaterial?number,?I?think,?in?Q4?was?down?about?4?million.?I?think?three?quarters?of?that?was?price?and?one?quarter?was?volume?related.?I?will?say?that?newsprint?price?has?been?kind?of?declining?really?all?throughout?2015.?We?think?that?bottom?has?been?hit?and?some?early?signs?of?prices?potentially?rising?next?year.?There's?been?some?small?unannounced?price?increases.?We'll?see?where?that?goes.?But?I?think?that?the?idea?that?the?prices?might?continue?to?climb,?we?don't?think?is?likely?to?happen.
Craig?Anthony?Huber?-?Huber?Research?Partners?LLC
Also?I?just?want?to?finish?up?here?with?some?–?a?couple?questions?on?costs.?In?the?fourth?quarter,?it?seemed?like?your?costs?were?meaningfully?better?than?you?guys?were?looking?for.?I?wonder?what?that?change?was?as?the?quarter?played?out??And?also,?for?this?new?year,?I?make?it?cost?adjustment?up?(26:10),?I?guess,?low?to?mid-single?digits.?If?you?take?out?the?digital?investments?there,?what?would?that?be,?please?
James?M.?Follo?-?Chief?Financial?Officer?&?Executive?Vice?President
Well,?we?haven't?given?–?we're?not?going?to?get?to?that?level?of?granularity.?The?one?thing?I?would?say?is?we?continue?to?both?in?–?all?throughout?2015?and?then?into?2016,?we?continue?to?take?out?costs?out?of?legacy?business.
That?will?continue.I?said?–?I?mentioned?that?newsprint?price?alone?was?a?pretty?big?help?in?2015.
It?will?be?a?help?in?2016?because?we're?still?beginning?–?in?the?early?part?of?the?year,?we're?still?be?comping?against?some?lower?prices,?but?prices?that?are?likely?to?be?higher?as?we?enter?the?back?half?of?the?year.
So,?I?think?–?so,?I'm?going?to?break?that?out,?but?I?will?say?that?there?was?a?similar?trend?that?occurred?this?year?too?which?is?pretty?strong?control?on?the?legacy?side,?pretty?good?investment?on?kind?of?theadvertising?technology?marketing?side.?We?think?those?likely?continue,?but?I?don't?want?to?be?more?precise?than?that.
Craig?Anthony?Huber?-?Huber?Research?Partners?LLC
Okay.
Mark?J.?T.?Thompson?-?President,?Chief?Executive?Officer?&?Director
Only?thing?we?might?add?is?that?2016?sees?a?couple?of?exceptional?news?events,?the?Olympic?Games,?the?Presidential?election,?which?have?got,?as?we're?one?off?one,?costs?that?recur?once?every?four?years,?but?not?every?year.
Craig?Anthony?Huber?-?Huber?Research?Partners?LLC
Great.?Thank?you.
Operator
Your?next?question?is?from?John?Janedis?from?Jefferies.
John?Janedis?-?Jefferies?LLC
Thank?you.?Good?morning.?Maybe?this?one's?for?Meredith?or?Mark.?But?you've?highlighted?timing?in?comps?and?the?digital?advertising?segment?and?expanded?the?offerings?to?advertisers.?I?was?wondering,?given?the?reported?mobile?growth?from?the?larger?pure-play?companies,?there?is?that?narrative?thatbudgets?are?further?shifting?from?print?to?mobile.I?was?hoping?you?could?comment?on?that,?given?your?unique?position?as?a?national?leader?in?print,?and?then?also?with?a?large?digital?and?growing?mobile?business.
Meredith?Kopit?Levien?-?Executive?Vice?President,?Chief?Revenue?Officer
Hi?there.?I?will?say?I?think?Mark?talked?about?the?level?to?which?mobile?grew?as?a?percentage?of?advertising.?So,?I?think,?in?the?fourth?quarter,?it?was?22%?of?our?advertising?and?most?of?that?growth?is?on?the?smartphone?specifically.?So,?we're?very?optimistic?about?that?continuing.
What?I'll?say?is?we're?learning?quite?a?bit?from?what's?going?well?in?mobile?on?the?direct?sales?side?with?our?Mobile?Moments?product?and?our?Flex?Frame?ad?product,?and?we're?going?to?translate?a?fair?amount?of?that?back?into?Web?display.?So,?I?think?we?have?some?–?while?that?business?is?sort?of?broadly?softening.
I?think?we?have?some?optimism?around?the?future?there.?We?treat?it?more?like?mobile.?And?I?think?Jim?talked?about?print?and?our?thoughts?on?sort?of?print?are?already?embedded?in?the?guidance.?But?there?are?plenty?of?categories?that?remain?quite?strong?in?print,?luxury?being?the?biggest?one?for?us.?And?we?still?have?a?fair?amount?of?optimism?there.
Mark?J.?T.?Thompson?-?President,?Chief?Executive?Officer?&?Director
And?some?of?the?transition?is?from?desktop?digital?to?mobile?rather?than?from?print?to?mobile.
Meredith?Kopit?Levien?-?Executive?Vice?President,?Chief?Revenue?Officer
Yeah.
Mark?J.?T.?Thompson?-?President,?Chief?Executive?Officer?&?Director
That's?the?other?thing.
John?Janedis?-?Jefferies?LLC
Yes.?So?you?think?the?majority?then?comes?from?display?
Meredith?Kopit?Levien?-?Executive?Vice?President,?Chief?Revenue?Officer
Say?that?again.
John?Janedis?-?Jefferies?LLC
I'm?sorry.?Do?you?think?the?majority?then?of?that?growth?is?coming?–?meaning?a?shift?from?display?or?particularly,?where?is?that?budget?coming?from?
Meredith?Kopit?Levien?-?Executive?Vice?President,?Chief?Revenue?Officer
Desktop?display?to?smartphone?versus?print?to?smartphone.
John?Janedis?-?Jefferies?LLC
Okay.?Thank?you.?And?then?maybe,?Jim,?just?a?quick?follow-up?in?terms?of?that?investment?in?digital.?I?mean,?I?don't?know?if?you?want?to?give?the?exact?number,?but?is?it?fair?to?say?backing?in?the?numbers?from?Q1?that?you're?looking?maybe?a?low?to?maybe?mid-tens?of?millions?investment?this?year?
James?M.?Follo?-?Chief?Financial?Officer?&?Executive?Vice?President
Well,?low-?to?mid-single?digit?on?our?base,?would?put?you?in?that?–?that's?as?good?as?the?numbers?I?can?give?off?a?base?of?whatever?numbers,?3.3?so?(29:53).
John?Janedis?-?Jefferies?LLC
Yeah.
James?M.?Follo?-?Chief?Financial?Officer?&?Executive?Vice?President
So,?that's?the?guidance?we're?giving.?It's?a?reasonable?range.?I?think?we're?going?to?have?to?be?adaptable?as?we?go?and?we?will.?We'll?leave?ourselves?some?room?to?experiment?and?to?test?a?few?things.?So,?I?don't?want?to?be?as?precise...
John?Janedis?-?Jefferies?LLC
Yeah.
James?M.?Follo?-?Chief?Financial?Officer?&?Executive?Vice?President
...as?the?number?that?I've?given?already.
Mark?J.?T.?Thompson?-?President,?Chief?Executive?Officer?&?Director
I?think,?I?mean,?I?want?to?say?our?posture?on?investment?is?to?experiment?and?back?success?and?feed?money?in?as?we?see?success.?So,?I?believe?we?should?remain?fairly?flexible?about?the?volume?of?investment?through?the?year.
John?Janedis?-?Jefferies?LLC
Thank?you?very?much.
Operator
Your?next?question?is?from?Doug?Arthur?from?Huber?Research?Partners.
Douglas?Middleton?Arthur?-?Huber?Research?Partners?LLC
Yes,?two?questions.?Meredith,?you?broke?out?mobile?as?22%?of?digital.
Can?you?update?us?on?video?as?a?percent?of?total??I?think?in?the?third?quarter,?you?said?less?than?10%?and?native.
And?then?the?second?question?to?Mark,?I?mean,?Mark,?obviously?we've?talked?a?lot?here?on?this?call?about?costs?and?digital?investment.?You?sort?of?implied?in?your?remarks?that?this?2016?is?a?transition?year,?it's?an?investment?year,?and?that?you?would?resume?operating?profit?growth?once?the?investment's?done.?Then?you?also?talked?about?structural?cost?cuts?in?the?legacy?business.?I'm?wondering?if?you?could?just?clarify?your?outlook?on?operating?profit?growth,?generally?speaking,?for?2016.?Thanks.
Meredith?Kopit?Levien?-?Executive?Vice?President,?Chief?Revenue?Officer
Let?me?go?first.?Hi?there.?So,video?is?still?a?fairly?small?percentage?of?our?overall?business?which?I?think?we've?said,small?but?growing.?So,?video?and?VR?were?strong?for?us?in?the?fourth?quarter?again?on?a?small?base,?but?we?do?expect?that?to?grow.
Branded?content?is?becoming?and?was?in?the?fourth?quarter?a?much?more?meaningful?percentage?of?the?business,?and?I'll?say?that?a?fair?amount?of?that?was?also?video?driven,?so?branded?content?programs?that?had?video?production?as?a?meaningful?part?of?what?we?were?doing.
Mark?J.?T.?Thompson?-?President,?Chief?Executive?Officer?&?Director
Okay.?And?if?I?can,?Doug?–?I?mean,?as?I?said?in?my?remarks,?Doug,?we're?committed?to?growing?profitability?over?time.?2016,?I?think,?you?correctly?identified?as?a?transitional?year.?And?as?Jim?said,?we?see?operating?costs?going?up?somewhat,?principally?because?of?investment.?But?we're?committed?to?margin?protection?and?growing?profitability?over?time.?Over?2016,?we're?going?to?look?hard?at?the?cost?base.?We've?had?success?in?recent?years.?And?indeed?in?the?quarter,?we're?talking?about?Q4?2015?in?containing?our?costs.?We?believe?there?is?scope?for?structural?reduction?in?our?costs?base.?We're?going?to?explore?that?plan?out?and?then?implement?it.?And?I'm?not?going?to?give?you?a?precise?timing?on?the?transition,?but?my?expectation?is?certainly?as?we?go?into?2017?that?we?will?be?looking?to?move?to?growth?in?EBITDA?and?growing?profitability?once?again.
Operator
There?are?no?further?questions?at?this?time.?I?will?the?turn?the?call?back?over?to?you,?Harlan?Toplitzky?for?closing?comments.
Harlan?Toplitzky?-?Executive?Director?of?Financial?Planning?&?Analysis
Thank?you?for?joining?us?this?morning.?We?look?forward?to?talking?to?you,?again,?next?quarter.
Operator
This?concludes?today's?conference?call.?You?may?now?disconnect.
