The New York Times Company this morning announced its Q1 earnings for 2013 and the picture is of a major newspaper company with dwindling profits. Net income was $3.1 million, down from $42.1 million from the same period a year earlier.
Total revenue fell 2 percent, with advertising diving 11.2 percent in Q1, though the company saw circulation revenue continue to grow, up 6.5 percent. The gap between circulation revenue and advertising continues to grow: circulation revenue has grown to $241.8 million, while ad revenue is down to $191.2 million.
“Circulation revenues rose nearly 7 percent, led by continued strength in our digital subscription initiatives. Paid digital subscriptions across the Company totaled approximately 708,000 at quarter end, an increase of more than 45 percent year-over-year from the end of the first quarter of 2012. At the same time, the difficult advertising environment has continued, though there are currently some signs of improvement in the second quarter," said Mark Thompson, president and chief executive officer.
"During the first quarter, we took a number of decisive steps to reposition the Company for the evolving media landscape. We announced that we were marketing for sale the New England Media Group and that later this year we will rebrand the International Herald Tribune as the International New York Times. We will be rolling out other strategic initiatives designed to further leverage The Times brand and newsroom to create new products and services for a wider range of customers domestically and around the globe," Thompson said in the NYT's earnings announcement.
The president and chief executive officer of The New York Times Company, Mark Thompson, also unveiled this morning the company's plans to reverse it fortunes. The strategy includes digital subscription/paid products, international expansion under the new unified brand; and a renewed emphasis on both video production and brand extensions. In other words, a paid content strategy that continues to de-emphasis advertising revenue, replaced by paid reader services and products.
"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 - video and live events are examples - where we're already seeing strong growth. We want to deepen our relationship with our existing loyal customers, but we also want to use a wider family of New York Times products to reach new customers both here and around the world," Thompson said.
The NYT Co.'s announcement outlined the strategy:
"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.
- A lower-priced paid product designed to allow access to The Times's most important and interesting stories in a convenient, media-rich package for consumers looking for an efficient way to stay informed. Consumer research has suggested very strong demand for such a product.
- Other new products, also at lower price points, that would offer deep access and additional content and other new features in specific content areas such as politics, technology, opinion, the arts and food.
- An enhanced tier that would offer extras at a higher price point to "all digital access" and print subscribers. Subscribers will likely be offered access to Times events and the ability to gift subscriptions and provide full family access, among other incentives.
"Last month, we announced a new organizational structure to help The Times concentrate on innovation and new product development as well as on the management of our existing businesses. Today's announcement should be seen alongside that reorganization - and our plans to sell the New England Media Group and rebrand the International Herald Tribune - as evidence of our determination to focus all of our energy and creativity on the future of The New York Times itself and to establish it as the most innovative as well as authoritative print and digital news provider in the world."