Revenues at The New York Times, doyenne of the US media industry, are being ravaged by the advertising downturn, but a hike in the price of the newspaper and deep cuts in operating costs are insulating shareholders from the worst of the recession.
The paper's parent company surprised Wall Street by turning a profit in the second quarter, thanks to a 20 per cent reduction in costs across the group, which also includes regional papers such as The Boston Globe and the internet site About.com.
But it was the continued deterioration in advertising that struck many analysts, including a 31.7 per cent year-over-year drop at The New York Times itself. Previously, only the regional titles – traditionally more reliant on job and property listings – had been suffering that badly. Online advertising, too, slumped 15.5 per cent across the group's portfolio of internet sites, which includes NYTimes.com, the most-read newspaper website in the world.
In one silver lining, Janet Robinson, New York Times Company chief executive, said that the rate of decline in advertising revenue had lessened as the quarter wore on, and July, although still sharply down, was showing another improvement.
"As we continue our transition from a company focused primarily on print to one that is increasingly digital in focus and multiplatform in delivery, online advertising revenues are a more important part of our mix," Ms Robinson said. "For the balance of the year, we are focused on developing innovative new products and platforms based on our high-quality journalism, particularly in the digital area."
The New York Times has floated the idea of charging for more of its digital content, but analysts are still waiting to see what strategy it will adopt. Previous attempts to get website readers to pay for some articles have met with failure.
This week The Boston Globe's largest union voted by a nearly two-to-one margin to approve pay cuts and other concessions that would save the 137-year-old paper $10m per year. The paper has been put up for sale.Reuse content