The New York Times Co.'s first-quarter earnings tumbled 93% at a time when the entire traditional media industry continues to reel.
The Times Co. (NYT), like so many others in its business, continues to struggle to come up with the answer to monetizing the Internet. While the companies crow that they have built up strong and attractive-looking websites, Wall Street is not as impressed as it would be if those advances instantly translated to the bottom line.
As advertising revenue streams dry up, companies like the New York Times fail to show the kind of innovation that their news pages are famous for.
The Times is trying to boost its global identity and reach consumers (don't call them "readers!") of varying income and age groups. The Times is dumping noncore assets, such as About.com, which never quite fit into the Times' strategy, as well as a stake in the Boston Red Sox
New York Times President and CEO Mark Thompson talks about "sustainable growth," but the jury is out about whether the Times can monetize its brand name -- arguably the best one in the entire media ecosystem.
Media industry analyst Ken Doctor sent out a report which eloquently pointed to the Times' problems.
Doctor declared: "The big number in the New York Times Company’s quarterly report today is a double-digit one: 13.3%
"That’s the Times’ loss in print ad revenue, and it’s a number — if it continues into the year — that could be devastating to new CEO Mark Thompson’s turnaround efforts. The Times Company’s decline in digital ads was 4%. Those two numbers have pushed the company back into the loss column. It reported a 2% loss in revenue for the quarter, after chalking up a Rubicon-crossing .3% gain for all of 2012."
And what about the Times' ballyhooed plan to install a paywall -- which occurred after many months of teeth-gnashing indecision at the newspaper company.
"In a nutshell, its reader revenue strategy, built atop the smart paywall system it erected two years ago, is working well, but is in danger of plateauing," says Doctor.
The Times' answer is to institute a lower-priced paid service to give people access to the paper's best stories in a convenient way It's smart of the Times to trumpet its most consumer-friendly stories involving tech, politics, commentry, food and culture.
Doctor is correct when he says: "The goal: to find new growth in reader revenue — revenue that has surpassed ad revenue at the Times, and then to more than make up for what will undoubtedly be continuing declines in advertising. The Times, like its peers in the newspaper and magazine business, is finding that its gasping for breath in the long-distance race with Google (GOOG), Facebook (FB), Yahoo (YHOO), Microsoft (MSFT) and AOL (AOL) for fast-growing digital ad dollars, even as those print dollars accelerate their movement to digital."
An industry in disarray, teetering on possible collapse. Its best known brand struggling to make a buck in difficult times. A management groping with these harsh realities.
It's a story that worthy of coverage in ... the New York Times.