{"id":11964,"date":"2016-11-02T02:19:00","date_gmt":"2016-11-02T07:19:00","guid":{"rendered":"http:\/\/www.mathewingram.com\/work\/?p=11964"},"modified":"2024-12-05T13:40:10","modified_gmt":"2024-12-05T18:40:10","slug":"the-new-york-times-scrambles-to-avoid-the-print-advertising-cliff","status":"publish","type":"post","link":"https:\/\/mathewingram.com\/work\/2016\/11\/02\/the-new-york-times-scrambles-to-avoid-the-print-advertising-cliff\/","title":{"rendered":"The New York Times scrambles to avoid the print advertising cliff"},"content":{"rendered":"\n
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The fact that print-based advertising revenue is declining is no surprise to anyone following the media industry. But what is hitting publishers like the New York Times<\/em> particularly hard is that this drop isn\u2019t at a steady pace\u2014instead, it\u2019s actually been picking up speed.<\/p>\n\n\n\n

In the first quarter, for example, the newspaper\u2019s revenue from print advertising fell 9%. In the second quarter, it dropped 14%. And in the latest quarter, it fell almost 19%.<\/p>\n\n\n\n

On the plus side, the Times<\/em>\u2018 digital-advertising revenue climbed 21% in the latest quarter<\/a>. But despite that growth, it still remains a much smaller number: The Times<\/em> made $44 million on various forms of digital advertising, including native or sponsored content, but almost twice that much from print advertising.<\/p>\n\n\n\n

The company said that growth in digital came from its in-house native advertising business, and also from video (among other things, the paper is being paid an estimated $3 million<\/a> by Facebook to produce regular video clips for the social network\u2019s Facebook Live feature).<\/p>\n\n\n\n

Note<\/strong>: This was\u00a0originally published\u00a0at Fortune, where I was a senior writer from 2015 to 2017<\/em><\/p>\n\n\n\n\n\n\n\n

At the same time, however, producing that kind of advertising and content is much more expensive than the traditional print kind, and that helped push the paper\u2019s costs up during the quarter, even as revenue fell.<\/p>\n\n\n\n

The Times<\/em> has made great strides in diversifying away from advertising with its digital subscription business, which also grew in the quarter. The paper added 116,000 subscribers, the best performance since the pay model launched in 2011, according to CEO Mark Thompson. \u201cWe think of ourselves as primarily a subscription business,\u201d he said on the Times\u2019 conference call.<\/p>\n\n\n\n

However, print is still overwhelmingly important on that side of the ledger as well: Digital subscribers only contributed $58 million in revenue for the quarter, while print subscribers generated $160 million.<\/p>\n\n\n\n

In other words, the digital side of the Times<\/em>\u2018 business is growing, in some cases rapidly, but it still isn\u2019t contributing enough to make up for the ongoing decline in print-based revenue. And if the fall in print advertising is accelerating, that is going to make the math even harder.<\/p>\n\n\n\n

The Times said that it expects the decline in print advertising revenue to continue in the future \u201cat a rate similar to that seen in the third quarter.\u201d In other words, almost 20% per quarter.<\/p>\n\n\n\n

The company said that its digital businesses were larger than its \u201clegacy\u201d or print businesses in the quarter that just ended. But that happened primarily because those legacy businesses are shrinking so rapidly, not because digital is growing quickly enough to outpace them.<\/p>\n\n\n\n

The Wall Street Journal<\/em> is going through something similar. It said Wednesday that it is consolidating a number<\/a> of sections of the paper, and it has offered company-wide buyouts to try to reduce costs.<\/p>\n\n\n\n

According to at least one estimate from a former senior executive at News Corp.<\/a> (which owns the Journal<\/em>), the newspaper is likely to come in as much as 30% below its revenue targets for the most recent quarter. The cuts it is making now are likely to only be the beginning.<\/p>\n\n\n\n

From a financial point of view, meanwhile, cutting costs can actually makes things look worse in the short term, as the Times<\/em>\u2018 latest results demonstrate. One of the main reasons the company\u2019s operating profit fell by 59% in the quarter was a $13-million charge it took for severance costs related to the latest round of newsroom buyouts.<\/p>\n\n\n\n

Those and other costs pushed the Times<\/em> into the red for the year, giving it a net loss of $14 million for the first nine months, compared to a profit of $11 million for the same period in 2015.<\/p>\n

<\/div>","protected":false},"excerpt":{"rendered":"

The fact that print-based advertising revenue is declining is no surprise to anyone following the media industry. But what is hitting publishers like the New York Times particularly hard is that this drop isn\u2019t at a steady pace\u2014instead, it\u2019s actually been picking up speed. In the first quarter, for example, the newspaper\u2019s revenue from print advertising fell … <\/p>\n

Continue reading “The New York Times scrambles to avoid the print advertising cliff”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crsspst_to_mathewingramblogwordpresscom":true,"mf2_syndication":[],"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[37],"tags":[],"class_list":["post-11964","post","type-post","status-publish","format-standard","hentry","category-fortune"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/mathewingram.com\/work\/wp-json\/wp\/v2\/posts\/11964","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mathewingram.com\/work\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mathewingram.com\/work\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mathewingram.com\/work\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mathewingram.com\/work\/wp-json\/wp\/v2\/comments?post=11964"}],"version-history":[{"count":1,"href":"https:\/\/mathewingram.com\/work\/wp-json\/wp\/v2\/posts\/11964\/revisions"}],"predecessor-version":[{"id":269621,"href":"https:\/\/mathewingram.com\/work\/wp-json\/wp\/v2\/posts\/11964\/revisions\/269621"}],"wp:attachment":[{"href":"https:\/\/mathewingram.com\/work\/wp-json\/wp\/v2\/media?parent=11964"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mathewingram.com\/work\/wp-json\/wp\/v2\/categories?post=11964"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mathewingram.com\/work\/wp-json\/wp\/v2\/tags?post=11964"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}