The Thompson road for the New York Times : Journalism over ad revenues
Former BBC Director General Mark Thompson, who took the helm as CEO of the New York Times last November, is counting on Times journalism to make up for an industrywide decline in print advertising .
Mark Thompson: More videos on the way
“We mean to grow our business by launching new products and services based on the unique strengths of Times journalism and by investing in the rapid expansion of existing operations,” Thompson said in a statement.
By the sheer quality and breadth of its journalism, The New York Times had become one of the best-known news organisations in the world.
"We believe that . . . there is a real opportunity to drive new international revenues, particularly through the acquisition of new digital subscribers."
Thompson commented on The Times winning four Pulitzer prizes last week and the brilliant coverage by the company’s journalists of the tragic events in Boston.
" We believe that the gold standard of reporting that The New York Times and its sister titles stand for is becoming a critical point of distinction and of competitive advantage. It is the rock on which we plan to build a successful future for the Company."
The focus on content emerged today as the Times first-quarter earnings fell 93% . The selling of assets "masked circulation increases spurred by its digital paywall," said the Wall Street Journal.
NYT plans include the introduction of new products—some with lower pricing, as well as a " higher-end package," that will provide broader access to online features and let subscribers attend New York Times events.
The new strategy will include a unified brand, a bigger focus abroad, as well as efforts to expand its video offerings and create brand extensions in areas that include games and e-commerce.
"The initiatives we are announcing today should be seen as a significant first step in our effort to put The New York Times Company on a path to sustainable growth," said Thompson.
Last year, Bloomberg reported, subscription revenue overtook ad sales for the first time. But advertising income is dropping faster than circulation sales are growing.
Advertising revenue dropped 11% in the last quarter, including a 13% decline in print advertising and 4% drop in digital advertising. A decline in print circulation was offset by a circulation revenue increase of 6.5% and recent price increases.
“The reality of the New York Times is they are moving away from ad dollars,” Kannan Venkateshwar, a media analyst at Barclays Plc in New York told Bloomberg.
“Thompson wants an HBO or a Netflix model, which means growing content revenues as opposed to ad revenues.”|
Times shares were down 0.2 percent to $8.98 at 11:40 a.m. in New York. Until yesterday shares were up 5.5 percent this year.
Total revenue fell 2 percent from a year earlier to $465.9 million, missing analysts’ estimates of $470.5 million on average, according to data compiled by Bloomberg.
The company IS selling more ads online, but they don’t get rates that print ads once did.
Said Bloomberg, "That’s forced the company to rely more on subscription revenue. The paywall, enacted in 2011, has encouraged Internet users to sign up for subscriptions. Paying readers climbed to 676,000 at the end of March, a 45 percent gain from a year earlier."
The Times also will be doing more online videos as part of Thompson’s strategy, rolling out in late 2013 and early 2014.
The NYT is selling its Boston Globe unit. After that the company will solely consist of the Times newspaper and related assets.