The New York Times (NYSE:NYT) announced late last week in its fourth-quarter 2019 earnings release that it will immediately begin bumping up prices for some digital subscribers. This news, coupled with another quarter of strong digital subscription additions, powered a nearly 11% jump in the stock during Thursday's trading. Shares of The Gray Lady have soared 150% cumulatively over the last three years. 

The Times stated that the price increase is initially aimed at a subset of its tenured digital subscription base. The company pointed out that its digital subscribers haven't seen an increase in their invoices since 2011, when it first launched its paid online news model.

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The Times' stock price surge has been powered by continual growth in these nonprint sign-ups, which has offset a decline in advertising. Indeed, digital subscription revenue rose 16% in the fourth quarter of 2019 against the prior-year period, versus the company's overall top-line growth of 1.1%. Adding pricing power to digital customer expansion should help boost revenue and margins in the coming quarters.

In the Times' earnings conference call, management explained that the organization has completed extensive testing of its planned subscription rate increase; the company doesn't anticipate losing substantial business as it begins to nudge up the renewal bar.

The rollout will impact about 25% of the company's domestic digital-only subscription base this year, or about 750,000 customers. Who will see the step-up in pricing? Management revealed during the call that tenure was one of the most important factors in selecting the higher-renewal cohort. In general, then, it's oldest customers first. After 2020, virtually all renewals will be completed at what the company sees as fairer market pricing for its growing array of journalism, content, and media services.

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