The New York Times' Worst Nightmare Just Came True: Digital Revenues Are In Decline

The New York Times

Photo: FXFowle

The New York Times’ Q1 2012 earnings make grim reading for fans of high-quality news: Almost nothing is going right at the newspaper group right now, and the one thing that is improving—digital subscriptions—isn’t improving fast enough to offset the media giant’s losses.

The Times saw declines in overall revenue, advertising revenue, print revenue, and even digital revenue, according to this SEC filing.Much of the digital decline is the fault of About.com, but the Times’ news group’s digital revenues also declined on their own.

Those declines came despite the $17.8 million sale of its holding in the Fenway Sports Group (owner of the Boston Red Sox and Liverpool F.C.).

The only bright spot was digital subs, including Times Select, the company said:

“Paid subscribers to digital subscription packages, e-readers and replica editions of The Times and the International Herald Tribune totaled approximately 454,000 as of March 18, 2012, an increase of approximately 16 per cent since the end of the fourth quarter of 2011.”

It’s easier to understand the slow-motion train wreck that is The Times if you see it in a set of charts. Here’s annual revenue (click to enlarge):

New york times

Photo: SEC

Now look at the annual growth rate. Note that the Times is in decline despite an increase in underlying growth and advertising spend generally. The Times’ digital revenue in Q1 2012 was actually a lower percentage of its revenue than it was a year ago :

new york times

Photo: SEC

In other words, the Times is in a secular decline unrelated to the economic cycle. It’s not rising and falling with the general economic tide.

Other horror stories from the 8-K include:

  • Total revenues decreased 0.3 per cent to $499.4 million from $500.7 million.
  • Advertising revenues decreased 8.1 per cent.
  • About.com revenues decreased 23.1 per cent to $23.9 million from $31.1 million.
  • Print and digital advertising revenues decreased at the News Media Group (not including About) 7.2 per cent and 2.3 per cent, respectively.
  • Total digital advertising revenues decreased 10.3 per cent to $71.1 million from $79.3 million primarily due to lower revenues at the About Group.
  • Digital ad revenues as a percentage of total ad revenue decreased: It was 29.9 per cent in the first quarter of 2012 compared with 30.6 per cent in the first quarter of 2011.

Expect layoffs, basically, just like last time.

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