New York Times earnings beat analysts’ projections
23 Oct 2009
The New York Times Co which has been short on good news for its business received a welcome break with a report on Thursday of $0.16 per share earnings which trounced a $0.01 per-share loss projection by analysts. Though the gain was driven by one-time cost cuts like the closing of a distribution arm there was another positive in the circulation revenues for the New York Times and the International Heral Times rising 6.7 per cent overtaking advertising revenues for the first time indicating that the Times is transforming into a reader, rather than advertiser-based business.
According to industry sources though the figures could hardly be taken for signs of good health, but in the extraordinary times for media companies and particularly in the backdrop of what could have happened America's paper of record did well.
But numbers are not everything and there are bigger problems lurking which would need to be addressed by publisher Arthur Sulzberger Jr and chief Janet Robinson who seem to be confused about the next move. The Times Co has sold off almost all of its non-new assets to keep going over the recent years and given the fact that it also lacks the support of diversified group operations such what Dow Jones can boast with News Corp, the company's operations are as a result, are exposed to much greater risk.
Sales from ads on the Times Co web site fell 7.2 per cent last quarter while strip out reference and advice site About.com which gained 7.2 per cent in revenue due to advances in its cost-per-click ad programme and Times Co digital performance were even worse. To add to its woes its new sites including NYTimes.com and Boston.com reported sales decline of 18.5 per cent. Across the broader Web display ad sales were flat as reported by the Interactive Advertising Bureau.
The drop in online advertising is especially worrying as the Times Co is the gold standard for high end marketing campaigns for big brands. The company with the web's most desirable readerships of 17.5 million monthly unique visitors has on board, a team of programmers who turn out flashy ads some of which integrate the Times' editorial content which is an unusual offering in online media.
Despite such high value offerings advertisers seem unwilling to dole out cash and one factor analysts say could be the plethora of data-savvy ad brokers and exchanges who seem to be able to match marketers to potential customers across a near-infinite range of sites, most of which charge far less for ads than sites like NYTimes.com.
Meanwhile, managers at the Times seem to be overly stretched out on a debate that over paid access to online content versus giving it out gratis.
