Thursday, April 25, 2013

A little perspective: NYT Co. revenue declines in a chart

While the paid content gurus have been applauding the NYT's digital subscription strategy and cheering on the end of advertising based publishing as we've known it, reality has a way of interrupting the march towards an ad-free future. Declining revenues are eating into what is left of the NYT's profits. (See post on earnings report and the company's "strategy for growth" here.)

In Q1 of 2013 the NYT Co. made $3.1 million in net income. That translates into just under $24 a minute. For a littler perspective, Apple, the company many tech and financial reporters believes is in decline, made $77,855 per minute in net income lat quarter.

Well, that is the fun way to look at it. The more realistic way to look at the situation is to see what is happening with revenue – both circulation and advertising.

Last year's Q1 was the first time that the Times reported first quarter revenue where circulation revenue surpassed advertising. Many paid content advocates cheered. But when with the growth shown this quarter in circ revenue, it turns out that 2013 Q1 circ revenue is only up 2 percent over the same quarter in 2010.

Where the P&L game really is at is in the advertising department. Ad revenue this quarter is less than half what it was in the same quarter of 2008. While ad revenue as decreased by $266.55 million, circulation revenue has increased by $15.16 million. The gap equals more than all the circulation revenue earned last quarter. In other words, if circulation revenue were to double in Q1 next year it would still be less than the declines seen in ad revenue since 2008.

Meanwhile, Mark Thompson, the new NYT Co. president and CEO wants more products launched that will features paid content strategies. I hope readers are willing to pony up the big dollars the new CEO thinks they will. Otherwise, we'll see more earnings reports like this last one.