Q4 2019 Earnings Call

Best of relations, please.

Go ahead. Thank you and welcome to the New York Times company's fourth-quarter and full-year 2019 earnings conference call on the call today. We have Mark Thompson president and chief executive officer rolled in Caputo Executive Vice President and Chief Financial Officer and Meredith go pick Le'Veon Executive Vice President and Chief Operating Officer before we begin I would like to remind you that managers 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 2018 10K 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 home with that. I will turn the call over to Mark Thompson. Thanks hollum. I'm good morning, everyone.

Begin this morning with our performance in 2019 as a whole and what it says about our progress and digital journey and then dive into the Q4 results a few weeks ago. We shared some key my wife those of the year with our colleagues here at the times and the wider world back in 2015. We set ourselves a goal of doubling digital Revenue to at least eight hundred million by the end of 2020. In fact, we managed to hit that goal of full year early with digital revenues of $801 in 2019, even more significantly we were able to add more than a million net dish subscriptions last year the largest number since the launch of the pay model in 2011 indeed the largest number in the history of the New York Times And as far as we know the history of American journalism

these new subscriptions

But we ended 2019 with approximately four point four million digital subscriptions as well as 850,000 print subscriptions for a grand total of 5.3 million again an all-time record for the company. So we're seeing continued real acceleration in our digital transition and especially in our core digital-only subscription business 29th, another big year for news and know that that's part of the explanation but the point of three other important factors first our new customer Journey, which we launched halfway through the year off. I went to requires most users to register and log-in if they want to access more than a limited number of times stories is clearly working. We now have many more millions that registered users that we used to age and I'll seen real success in converting them to subscribers.

Second was successfully graduating subscribers on even our lowest introductory offers to higher prices and continuing to effectively manage retention as a whole Seventeen months after the introduction of the dollar a week offer in the US and five months after the 1st or a week cohorts hit the one-year Mark. We're still seeing them retain in line with other cohorts.

this week

We begin to roll out a price rise to a subset of our tenured digital-only new subscription base. Our broader protest would retention gives us confidence that will be able to execute this effectively two months. This is the first price is the launch of the pay modeling 2011 since then, we've got only seen nine years of rising costs, but also unprecedented investment by the time it is journalism and digital offerings. We believed our digital news reports still represents, excellent value-for-money, even with this price rise, our loyal subscribers know that their financial contribution plays an essential role in maintaining the quality threat and depth of the report they value so much.

The third factor is this under Meredith leadership. We're now running digital operations at the times in a radically different way than even a couple of years ago with cross-disciplinary teams to enjoy significant autonomy and access to the machine learning engineering and testing capabilities. They need to achieve a set of key Enterprise objectives. This new way of life has reduced decision cycle times. It's enabled us to make some bold new bets like that new registration and login model with greater speed and confidence than before but it also means that we can continually optimize every part of the digital subscription business with dozens of parallel tests running in the background of all the time.

We believe that this break through it.

How we do digital is perhaps the biggest single reason why we're seeing such sustain momentum in the model and why are cordage the results Rd correlating with the rest of our industry off a similar objective-based team sense approach also explains the progress we made in 2019 with our Standalone products cooking crossword and wire cutter as well as audio box and TV, but now let's look briefly at queue for itself. We added a total of 342000 net new digital-only subscriptions of which 232,000. Where do I call digital only news product the balance to cooking and crossword with cooking especially having a spectacular end to a strong year with 68,000 net new subscriptions in the quarterback.

The underlying my earlier point about acceleration. It's worth noting that 232,000 new subscriptions to Arc or digital-only news product with 35% more than 172000. We added in Q4 2018 and 134% more than 99,000. We added in the Q4 2017.

It'll only subscription Revenue grew 16% compared to a year earlier to 122 million dollars.

Encouraging me to spite the acceleration of subscription numbers marketing costs actually fell year-over-year.

Oh, they will continue to spend marketing dollars to help drive digital growth when the economics make sense and therefore do not guarantee that we'll see reduced spend in this category in every teacher quarter the fact that we saw these positive moves in both Q3 and Q4 suggest that improving operating leverage in our Digital model is achievable

We want in a law school that the big spurt in digital advertising 32% year-over-year, which we saw in Q4 2018 would make you feel 29th a tough quarter for us and we guided to a decline in the mid team percentages. In fact, we did a little bit better than that posting an 11% year-over-year decline as your head and gives you guidance in a moment. We expect to see a sequential Improvement in q1 despite another tough concert.

but let me take a

To set out a broader perspective on digital advertising and it's a place in our overall digital growth story.

Past few years in digital advertising. I mean generally tough for premium Publishers with the major digital platforms taking nearly all of the growth in the market and the shifts from desktop to mobile and from director of the open market programmatic boat accelerating.

At the times we booked this trend with a cumulative annual growth rate of 7% over the past four years. We achieve that by reducing our Reliance on generic digital display and then a distinctive new offerings in areas like branded content and marketing services and podcasting as well as by improving our product offering and performance on mobile.

The pressures on the broader industry. I like to continue in the coming years and will continue to transform our advertising business to respond to them.

You know in addition to the more traditional segments within our digital advertising mix with successfully forging large-scale Partnerships with the world's leading Brands and building revenue from audio and other new song. It's like last year's brilliantly successful Food Festival this year will launch 4 involve new first-party database Advertising Solutions to create new privacy safe ways of reaching are engaged and valuable audience.

We're headed.

Many of the world's other Publishers in all of this we believe but the pivot will take his time to complete we expect to return to your of a year Revenue growth from our digital advertising business by the second half of 2012-13. But this growth rate will be relatively subdued and below that 7% kegger for those and some subsequent quarters as the balance of the business shifts.

But the strong and sustained growth we're seeing in our digital subscription business means that we remain confident about hitting our overall digital Revenue targets, despite the more constrained immediate prospects for growth appetizing side indeed the current strategic track of a business strongly endorses our declaration four and a half years ago that the times is a subscription first publisher.

So he's why when confronted with a potential trade off between our digital subscription and advertising businesses. We generally favored subscriptions and the best possible user experience with a case in point is the departure of open-market programmatic advertising from our apps last week, which we believe will significantly improve the user experience while also increasing the value of our directly sold advertising.

Prince

Captions, uh-uh revenues in Q4 declined approximately 3% and print advertising by 10 and a half percent year-over-year, but the strength on the digital side members total company Revenue grew and a quarter by just over 1% to 508 million dollars adjusted operating costs grew slightly year-over-year to 412 million dollars with higher content costs total including production costs related to our TV series or weekly as well as increased Staffing in our Newsroom partly offset by lowering costs in production and distribution advertising and that loan no one expected marketing cost line. I mentioned earlier the net result was that adjusted operating profit for the company Grew From 94 million dollars in keybord2018 to over $96.29.

So a good quarter to have a strong year for the company and we enter twenty-twenty real confidence not just in the current run-rate of the business, but also in the potential of the New York Times to go through Thursday close by finding additional laborers acceleration in our call digital news product and by finding new ways of capitalizing on the incredible IP and Customer Loyalty that the New York Times come ons but now the details look at the call to his Road. Thank you Mark and good morning. Everyone is Mark says 2019 was a strong year for the company and we continue to be optimistic about the opportunity ahead adjusted diluted earnings per share was $0.43 in the quarter $0.11 higher than the prior-year we reported adjusted operating profit of approximately fifty six million dollars in the fourth quarter, which is slightly higher than the same period in 2018.

total subscription

Revenues increased approximately four and half percent in the quarter with digital-only subscription Revenue growing 16% to $122. This represents a sequential increase in the rate of quarterly growth is Mark said we remain very happy with the retention received from the dollar week promotional subscriptions who have passed the year-long promotional. We continue to run a test on a deliberately bifurcate subscriptions at promotion expiration with approximately half moving to full price while the others are moved to an intermediate step up price. The goal of the test is to identify characteristics that might indicate whether a subscriber maybe more price-sensitive and therefore may require additional engagement with our product before moving to full price over the longer term. We expect them most subscriptions will eventually move to full price.

Quarterly digital News subscription declined approximately 10% compared to the prior-year and approximately 3% compared to the prior quarter while the impact from a large number of newly acquired subscriptions mostly on the dollar week promotion continue to be larger than the benefit from existing subscriptions who's promotional offers ended and graduated to higher prices during the. This marks a slight deceleration in the rate of our could decline over both the prior year and quarter.

His success were experiencing in retaining new subscriptions beyond their initial promotional. Either at full price or an intermediate step up price. We plan to continue to use a low introductory price to acquire on retaining profitable subscribers, as was mentioned in this quarter. We have begun to phase in a price increase for many of our more tenured digital news subscriptions with those currently paying $15 per billing cycle moving to $17. We expect the phasing to consist of a handful of tranches with the largest Ranch of subscriptions affected beginning with their March bill off.

We expect approximately 750,000 domestic subscriptions to see a price rise by the end of 2020 the effect on q1 digital subscription revenue from this price increase is expected to be modest due to the rollout occurring late in the quarter and this is reflected in our guidance.

We also expect the rate of pressure on our puta moderate in subsequent quarters this year on the print subscription side revenues were down 3.2% off due to decline in the number of Home Delivery subscriptions. You continue to shift our subscribers moving to less frequent frequent and therefore less expensive delivery packages as well. As a decline in single-copy sales. This decrease in print subscription revenues was partially offset by a home delivery price increase that was implemented earlier in the year total daily circulation declined 10.3% in the quarter compared with prior-year while Sunday circulation declined 8.3%

As we mentioned on last quarter.

Call at the end of August the Starbucks retail chain discontinued the district distribution of all print newspapers including the New York Times at its corporate-owned locations. This had a meaningful impact on copies accounting for approximately two percentage points of the decline print subscription. Revenue was approximately one percentage Point lower as a result of the loss of this distribution channel. The effect was more dramatic than in the third quarter when only one month of sales was affected print and digital advertising Revenue each declined approximately 10 and a half percent compared with the prior. The decrease in digital advertising revenue is largely a result of strong comparisons in the prior-year indirect sold advertising both on our core digital platforms. And in Creative Services actually offset by continued growth and podcasts.

The print advertising result was mainly due to declines in the luxury and financial categories.

Other revenues grew 30% compared with the prior-year to $62 principally driven by Revenue associated with our television series The Weekly which are ten new episodes in the quarter as well as a licensing Revenue related to Facebook news.

Jump operating costs and adjusted operating costs each increased approximately 1% in the quarter as a result of higher content costs reflecting both higher Staffing in The Newsroom as well as production costs related of the weekly growth in the number of employees working in digital product development. Also drove Claus hire these increases were substantially offset by lower costs and print production and distribution advertising and marketing our effective tax rate for the fourth quarter was 10% which was lower than the statutory tax rate largely due to the reduced tax rate on foreign derived income off and federal tax credits for research activities on a going forward basis. We continue to expect our tax rate to be approximately 25% on every dollar of a marginal income with some variability off the quarterly effective rate.

The underfunded balance of our qualified pension plans at the end of the year was approximately twelve million dollars in the plans were approximately 99% funded.

To the balance sheet are cash and marketable securities balance into the year at $684 million dollars the decrease from the prior quarter as a result of an approximate $245 payment made to age size are option to retire the sale-leaseback of our headquarters building with this debt retirement. The company has regained full control of our original lease hold condominium interest in our headquarters building and the company is debt-free as a result the interest expense line on our income statement will flip to interest income in the first quarter of 2020.

Given the strong results in 2019 and the retirement of our last piece of outstanding debt, the company's board of directors has approved a $0.01 per share or 20% increase to the wage to six cents management and our board will continue to keep the balance sheet and our plans for Capital allocation underclothes review.

But I have previously stated we have a strong preference for maintaining the flexibility to invest when and in the manner we want in order to fuel further growth in our digital business has independent of the vagaries of the market and was therefore continue to take a relatively conservative approach to the management of the balance sheet.

Let me conclude with our outlook for the first quarter of 2020.

Total subscription revenues are expected to increase in the mid-single digits compared with the first quarter of 2019 with digital-only subscription Revenue expected to increase in the High Teens. Overall advertising revenues are expected to decrease approximately 10% compared with the first quarter of 2019 and digital advertising revenues are expected to decrease in a single digits other revenues are expected to increase approximately 15% largely due to our television series The Weekly and Licensing revenue from Facebook news.

Well operating costs and adjusted operating costs are expected to increase approximately five to seven percent compared with the first quarter of 2019 as we continue to invest in the driver's of digital subscription growth. And with that we'd be happy to open it up for questions.

We will now begin the question-and-answer session to ask a question. You may press * then 1 on your touchtone phone. If you are using a speaker phone, please pick up your handset before pressing the key to withdraw your question, please press * then two at this time. We will pause momentarily to assemble our roster home. And our first question comes from John Belton of evercore, please go ahead. Hi everyone. I wanted to talk a little bit more about the price increase so long. So I was like you said by the end of the year would impact about 750,000 domestic Subs. So by my math that's around 25% of your domestic digital-only new Subs, How did you choose exactly which cohorts you were going to take price on how do we think about the other 75% of the base? I know a lot of those are on on promo pricing bulb.

how do we think about you know, the

Full price of the product moving forward more broadly. Thank you. Good morning, John. Let me begin with that and I'll hand over to Roland. I mean just the the and let me talk about the broader approach and I'll get ready to deal with specifics. This is the first prize price rise that we've uh introduced since the launch Remodel and we think it's dead. It's entirely appropriate for the reasons. I said, we have many years of rising prices. We've also added hundreds of of new journalist during our news room and in all sorts of ways broadening send it out are offering to subscribers and we we think the times will continue to to represent really good value. We think it makes sense. There's obviously we apparently have a file with a large number of people who are fairly new to us and many of them are all are still enjoying introductory offers. We thought it was appropriate to take if you like our dog

Tenured subscribers many of them have been enjoying the time for many many years without a price rise and beginning the process of our move.

Two prices up with with that group, but with a A View as as well as said that overtime this this new has were headlines sticker price is going to be coming back on that everyone who becomes a full price subscriber of the New York Times on digital and that means ultimately we we we want ones people are dead out of their introductory. You know, the the target what we do get as many as possible of our subscribers to this new full price, but Roland you want to talk a bit about the some of the 50,000 sure John just am kind of the criteria we chose basically we started with what which seem like reasonable approach to how you would apply a price increase and then then I think as you know, we tend up that affect extensive test last year and we tested a whole bunch of things and used the results of that test to inform what we should set as the final criteria. It's not going to Chef

What all those items are but as we've mentioned tenure is a is a large a true.

You are a large criteria here and then thinking about the numbers. I think the way to think about it is this being the first price increase that we've implemented wage 2011 and knowing that tenure is one of the major criteria as you can imagine the first time you do this you apply the price increase to subscribe that have just hit that tenure criteria those that have hit that many moons ago and everyone in between. So if you think about going forward with this while you'll get the benefit of that basically $2 increase on those subscribers this year next year going forward at cetera the incremental number of folks that were passed through that that tenure gate will be significantly smaller than than the first time is implemented so it sounds like ten years.

Is probably the most important or the the biggest criteria are you using are you using engagement as well as it can we think about sort of a a usage-based model longer? Yeah, we're not we're not going to disclose it. But we do have a list of criteria tenure being one of them in kind of the most obvious one as a as a surrogate for valuable beyond that. I don't think we have a lot to say about the criteria of this point. John is in addition to the tests. We did on the digital price rise in 2029 team. We also have many many years of experience with are very loyal print subscribers and thinking about price and our lessons and the tax we developed over many years of the print side were also applying to the digital price eyes.

Got it. Thank you very much.

Our next question comes from Alexia quadrant of JPMorgan, please go ahead. I thank you. I just wanted to follow up on a couple of comments you made in your opening remarks, I guess first on the the folks coming off the dollar a week promotion any closing of us in terms of of turn in general how it's impacted. I know you mentioned half go to full price a half go kind of to a step up in between. Do you have any any kind of give us in terms of what you know, what percentage what are you have to keep or revert back to the dollar a week? So to keep them engaged and then I have a couple of follow-ups happy to good morning Alexia. I think Roland basically gave the detail that we feel comfortable giving Which is roughly about half of the population goes up to full price. Roughly. The other half goes to a step up rice. There's a small number of people who we end up saving dead.

The dollar a week in general. It looks quite similar to what?

You've seen in our you know prior code to 50% off and we are feeling really good about it. The the thing to sort of know and think about going forward is as we're doing this relates a little too Jon Cryer question. We are training models with machine learning to better understand the relationship of Engagement willingness to step up and full price so long, I think we're going to get you should expect us to get better over time as we go so pleased with where we are so far and I think it gets better over time. Just the only thing I would add to that quantitatively is that over 200,000 folks have cycled through their Promotional. And we're still seeing retention overall in line with prior offers. So we're we're quite quite happy with that and we feel that that is that really establishes what we can expect going forward. That's right, and I'll just say in relation to that in relation to Thursday.

general price for people who

Come in at a dollar a week and the price rise more generally a huge component of why we expect to continue to have the pricing power that Mark described. Is it just the additional journalistic value? We're putting in into what people get from us, but also the digital product value and there's an enormous amount of work going on to ensure that the divorce experience itself the app our emails the the journey that one has as a subscriber to the New York Times is that much more enriching and personalized and relevant. I think that's going to play a big role in our continuing pricing power. So it sounds like basically from what you're saying about, you know, the the the retention rate thing down to the past and also your commentary on the earlier question about how much research and testing you did on the price range for the tenured subscribers that you know, we probably don't necessarily. Yep.

Probably will not see a pick-up in should write in general company was sort of wide as the year progresses or at least I should say but there's not we should necessarily anticipate any pickup in Sharon, right is that fair wage? Um, um, but but we we there's no question that our capabilities in both these areas both step up and we believe also from the testing we did with price with price and more broadly with retention cuz we're tensions are much bigger topic than just than these. These price point is also about loyalty just as many years he's getting better and I think just to go back to the point where is made and the rodent as well that that that that fifty-fifty split when we took the early as a period of the of the period of the step up from a dollar a week and half and of the cohorts moved to the full price and half to Thursday.

at the moment. Fifty-fifty which begins around random song plays Madden said we're getting more sophisticated about how we assign people to the

Just two groups that will continue to develop. So we think this is an area where like everything else would Lillian digital there's still room for optimization. And so yeah, I would say that generally. Well, we feel very confident about about holding attention to to low levels as we go forward and then just jumping to your commentary about which which I think you've been doing now for a couple of orders is the requiring the reader the Casual readers to register their email to continue to read I just I'm curious how much that has improved your ability to convert them to a paid subscriber. And also do you know how much it may help on the advertising front? Yeah good questions the short answer to your first question is a lot. So we're really pleased with what we're seeing in terms of the number of people who we can compel to register so that they get more access to content were hard at work on after they register figuring out how long

Get them to return and engage they're incredibly focused on how many people are logged in on the site at any given time. I'm very pleased with what we're seeing there. And then obviously we did this be a registered engaged user is much more likely to convert and there's an enormous amount of effort in sort of all three of those areas. So I would say it's a big driver and you know, we still have a lot more kind of room to go to improve the result there on the advertising side. You're getting at the long game that that we're intending same way. And and that long game is that the more direct relationships we have with deeply engaged users who were to whom were delivering an increasingly personalized experience the better first-party data. We have to build a different kind of digital ad business and we are hard at work and that as well. This is the first time

Dear where you'll see us begin to do some material.

Real things around privacy forward first-party data. It's going to take a long time just to set expectations to get that into the water supply in a way that you know, because it makes the make becomes a growth driver in the business, but we're confident that it's the right approach and a competitive approach for our at business.

And then just last one on the post Facebook licensing deal and I could change in leadership at Apple news. Is there an opportunity to renegotiate with apple or even other partners using that kind of Facebook page for the Fremont? So let's say what we said both inside and outside. The building is is is first of the broad principle that we think that digital platform getting real value from having our presence our brand presents and times headlines maybe time summaries in their environments and that should be reflected in in value back to us to help pay for the Germans which they're they're enjoying some of the value of that broad principle doesn't just apply to Facebook. It applies ultimately assumed to ask who's calling me call and so as we go forward, I'm not going to go into individual names but we we do expect to review our relationship with every significant. Uh,

Um, uh a company that that Distributing the times in different forms. Um, this is a different philosophy in the past in the past. There was a sense that perhaps

E platforms were doing us a favor by by Distributing are content to users. We think that the the balance of value has changed now and so you should expect this now down to predict what's going to happen, but you should expect to see a sitting down with all of the major platforms And discussing our relationship over the coming months and years.

Thank you very much.

Our next question comes from lots of Cannonball research, please. Go ahead. Good morning. Just wanted to clarify the comments on the digital advertising Revenue growth. Did they understand correctly that the sub 7% growth will come in the second half of the year or is it going to be for the full year? We will see growth. I'll just refer back to what Mark said, which is we're expecting in the near-term sequential Improvement, but we still got very tough comps through the first half of the year. And in fact what I would call short to medium-term were expecting, you know moderate growth over the Long Haul as I've just described to Alexia. We remain optimistic that we can have a strong add business based on, you know, scaling direct relationships with deeply engaged subscribers and first-party data that comes from that.

okay a couple of

Quick ones. So if I look at the guidance for other revenue, is it fair to assume that in q1? All of the year-on-year growth is from Facebook and the daily and I could give us some idea of how the seasonality within the year will progress. That would be great and one a bigger picture question. I don't think you mentioned the new cycle this call, I'm sorry if I missed it. But do you feel like with your grown sophistication with the subscriber acquisition and retention the new cycle and the the overall environment is less important now and will become less and less important as as we go. So would appreciate your thoughts on this subject.

Let me go first on the other Revenue sure, the the biggest chunk will be attributable to the weekly, which we hadn't launched as of q1 last year Facebook's a piece of it. But there's there's many other line items there that that are driving the growth. But if I was to pick one item, it would be the weekly since it's dead. It's comping against the zero Revenue in the first quarter of last year. I can start I think maybe both both address addressed news cycle wage. I think the important you would say is the times is is not Reliant anymore on any if it ever was on anyone's story, I would debate whether we ever but we look at recent weeks the beginning of 2020, um, clearly us politics both impeachment and the run-up to the Iowa caucuses the beginning of birth.

presidential election campaign to be

Important but there have been many many other very very big stories coronaviruses. It is an example the Australian bush fires with another example wage the project that could be brought and others in the helicopter crash would be another example, honestly, the Harry and Meghan story is a is another example and I think the fundamental strength of the times it's a sheer breadth, uh of it. It's journalistic offering. I mean, you know, one of the biggest successes 2019 is the adaptation of of Modern Love is a dog from the series. We have a very very broad range of Ip and and it was I think to be honest a faulty analysis to suggest that the only thing that was really going on home from 2016-17 to today was was a kind of encoded front bumper was much much more going on and crucially that's now been backed by fundamental improve month.

in the way we think of

That digital product digital engagement and our customer Journey, but marriage you want to I think all that is right. I'll just add if you look at the success we've seen even just in the prior quarter, but very broadly wage in our cooking product and in our crosswords and increasingly new games product. They're playing a big role in the model, and I think that just suggest that we had a number of opportunities to make our way into people's lives and and get them to form habits, and we are launching new product all the time as a means of doing that. I thought, you know audio is a great example. We launched about politics, but we launched a new podcast. I think three or four days ago called the field and you're going to feel much more product not just about politics coming out of audio this year. Thank you.

Our next question comes from Kenan venkateshwara of Barclays, please go ahead you see if I could I mean the 1st is Thursday and Roland if we could talk about the Cadence of Christ this year because you know, you do have price increases coming up in the first quarter and that drove through the rest of the year. And then of course, you have the promotional rule loss. So as you look at the rest of the year, is there a point at which we can get to Flat growth by the time you exit the year off from a conversion perspective and you look at registered versus unregistered users Meredith. If you could just touch on what that conversion to feed process looks like compared to the period before you started this registration requirement and when when folks convert what price is it at? Is it at the promotional dollar price or is it you know,

the $2 price for the 50

Send off. I mean if you could give us some sense of the economics behind conversion, that would be great and mark from your perspective. You know News Corp recently launched this aggregation products. Navigate News. Why isn't that something that is attractive to New York Times just from you know, given the fact that it can also help you raise prices over time and become a you know, a bigger Force than that area. Thanks. So I think that was for questions in the air, but rather do you want to conversation number one? There's so many questions. I don't remember. I'm not sure exactly what specifically what line you are asking me about. Can you just rephrase the question ESO Cadence of price increases because you have price increases as well as Promotional roloffs and then you have of course have news that's coming in on promotions. Yeah, the kitchen's of price with this year. I mean do we get to a point where instead of decline? Yep?

Can you get to Flat growth as we are you talking about are who are you talking about what I thought so we're going.

To see Improvement in in our our poll results over the next few quarters. I think what you'll see is, if we're talking sequentially when we get the full effect of the price increase that could that could get us to get us to Flat took over the course of the year. We think what we'll see is a continued pressure on our pool because we think we're going to continue to bring in large groups of new subscribers at the promotion rate that will somewhat depress our poop. But overall, we think that that the both the sequential and the year-over-year decrease in our own know will improve with with a possibility of a sequential flattish, um coming through when we see the full full power of the price increase

But there's a lot going on including including underlying acceleration in the numbers of people coming in which is a further complication when you when you try and figure out what's going on. I mean, it's ultimately very good news for us. But but obviously the fact that the sheer numbers of people are coming in is is affecting the TOEFL way in which you find out where a Grove and arpu is I don't I don't think you'll see a pivot point where it will turn flat and positive and then continue to get more positive in this year. It's specifically because of what Mark said we were going to continue to bring on large large numbers of new subscribers in it. And as we've stated, we believe that using the promotional price is one of the levers that will continue to use their and if you think about that ratio the new subscribers to those transitioning to higher prices including those getting a price increase, there's still uh, a larger effect due to the new subscribers coming on the file. That's right. I think I think

Does take us to your next question which I read you can tell me if if you meant something different is our the register.

Users being asked, you know, are we presenting them with a dollar a week or are we presenting them with other offers in the answer is yes both we do bring in a large number of people on a dollar a week and because you know we're our confidence is growing on our ability to actually get those people to engage and doing things like download the app and set up our bolo Tab and sign up for email and sign up for alerts we see subscription at a dollar a week as a means of engaging so they they begin a relationship with us and into that relationship. We can get them to engage more such that they realize more value and ultimately come up in price. We're feeling increasingly confident about that that said I think the other question you're asking is are we seeing any smoothie out in the model as we have a code word of people who registered and logged in more rep.

And I think it's fair to say that is the thing ultimately trying to get to which is you know, in in a model where you've got more engaged users off regularly on site. You don't always have to get them at a promotional price. I would say we're still heavily weighted to promotional offers today, but over time that could change and the the only other thing I think you were asking is our most people converting from Reggie. I'll say conversion on Reggie I said this to Alexia is certainly much better image why we flip the model. We do still have plenty people who come and convert as Anonymous users potentially because we put up some frictions first and they might as well go ahead and because they're coming to us or you know, emotional is not behavioral reasons. So we we still think there's room in Anonymous conversion as well. And can I ask the question about can yep?

Which is the view?

I got a recording News Corp board can use cool aggregation, uh site. Well firstly we're not active Partners in that often times content indeed. The time is logos being used currently without any agreement or arrangement in place with us. It's another site which is attempting to use our content along with other people's contracts to create something. I can't work out yet. Whether it's as you were to prove a point about aggregation, whether it's intended to be fully fully commercial Thursday, we want to go down that road. I think if the question we are really focused on a very very simple business model, which is trying to produce the world's best journalism to gather it together in excellent digital and print products and then find a a deeply engaged loyal audience for it including many millions of people with the Williams to pay for it. We don't dead.

I think rule out in theory the idea of

With with other providers to offer a broader bundle service, but generic aggregation frankly, whether algorithmic or or human or algorithmic wage human of news headlines seems to me honestly to be part of the first generation with the Internet. It's fraught with difficulties. It's good exists. Clearly. It's generally been incorrectly bad news for the world's individual news Publishers, and we don't see that as part of the main as it were strategic part board for this company. So, you know, you know with with news, um, as with the other platforms will look at it. No doubt will at some point talk to them about our presence on it the the use of our logos and so forth just as we are with other platforms as you pass me saying say earlier, but we don't see that kind of ugh rogation, which is frankly almost a commodity out there now in the internet as birth

a wait for for the New York Times

Our next question comes from Doug Arthur of humor research Partners, please go ahead. Yeah. Thank you. Three questions on the weekly. Can you just walk in mind is this a multi-year commitment with FX or is after the current after the current run? Is there can you can you talk about the future of its Second Life the Meredith? Can you you mentioned podcasting? Obviously, we know the success of the daily kind of what are the thoughts about monetizing that platform over the next couple of years and then finally on International and paid subscribers more. Can you just sort of update us on your thoughts there? Thank thank you. Yes, great. I'll take the first two thousand shot of the third on the weekly want to say we're incredibly proud of the work so far. We've had a very good experience with our partners FX and Hulu. We know that.

Our work will continue with them in some way and we're working through now.

Thank you so much. Very helpful.

What shape it will take? I would say in any scenario. I don't Envision that any change to what we're doing will have a big economic impact. So that's the week long on podcasting and and monetizing give you a slightly longer answer which is to say we are monetizing it quite well today as a Hi-C p.m. Add business that is in an enormous amount of demand. I don't see that abating anytime soon that the demand for for audio and particularly with daily audio habit-forming audio with a great brand in the market is incredibly strong. So we're optimistic about that business as an ad business for the perceivable future we are off so and I've talked about this on prior calls were also pretty confident in our ability to use the daily in particular as a Launchpad for other audio shown. No.

Just mentioned the field which launched earlier this week.

I already think is is building an audience. You you saw launch 1619 in the field of the daily. So to us the the daily life in particular and our audio in general presents a really unique sort of distribution mechanism into the world of for building other than the other thing I'll say about podcasting is that if you listen to The Daily and and our other podcasts, you will hear that pretty regularly we are now that's what I call house ads. But you know, we're we're running essentially commercials for the times where the people who are doing the work on the daily describe the pursuit of of our journalism and that is really effective. So we we see it as a way to stimulate the model generally and to draw people into our funnel dead.

And we don't rule out.

That we will do that over time in even more direct wave. I'm specifically the the other one of the great achievements of the of the daily has been too deeply engaged twenty years plus of engagement on a non smart phones typically on a daily basis millions of Millennials. So that the the this is potentially a new deeply engaged audience for the New York Times already frankly an extremely cash generative activity for us through advertising but exactly as murders says God knows where that takes you over time in terms of building up the the the body of of really engaged loyal users between know is the is the foundation of odd future subscribers. So I think very encouraging let me I'm sure marijuana see something International but let me just begin begin with International. We're we're very bullish about International.

Sensual, um, um, we we have I think we disclose that about 17% of the subscription five.

Is is from a subscriber to her outside the US the current run-rate serve over 20% and we're at the moment by and by the way, this is a further complication in terms of the truck. Well, um, we're we're currently out there experimenting with very deep and kind of as it works locally relevant offer price point we're beginning to learn from others including some of the big streamers about trying to fit introductory prices to different markets around the world and I would say although this is fairly early days, which is pretty striking results in terms of getting again entirely new, uh, um levels of interest in in subscription of the time. So so I think one is you're going to see in 2021 is is the international story which is already a very strong Story. I mean, I think we I think we've twelve EXT and the number of subscribers is desire arises to use negative. At least it'd be dead.

It's growing faster than the even the domestic and domestic.

Obviously a pretty good story as well, but we we really we're looking forward to to this year next year seeing really further striking growth and you know, I would say about the international users. They're very interested in stories. But like domestic users they're also reading and consuming content about the whole world. And I think the idea of the times is as a news organization which reports the world to the world is is really a growing proposition for us. I think that's right. I'll two things to it one is just I would say in the last probably a few quarters were beginning to see real growth in outer marketsandmarkets where we hadn't been terribly well penetrated before so particular grew up in Asia and in European market beyond the UK where we've been incredibly focused and we're excited about that and you see a lot of opportunity. They're also say there's a particular Focus birth.

Right now it's not the whole of what Mark just described but it's an important.

Part of it on the international student which we see as you know, really big long-term opportunity for the times and with that some experiments in the market there that we feel good about life and I'll I'll just add that Mark in his script pointed to just are Improvement generally on running the digital operations of the business or approach to testing and lounge or ability to do many more complex multivariate tests at the same time and I would say most of that internationally being organized to do that really well internationally is ahead of us.

Great. Thank you.

This concludes our question-and-answer session. I would like to turn the conference back over to Harlan for any closing remarks. Thank you for joining us this morning. We look forward to talking to you again next month.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.