New York Times Tries Something New to Help Halt Falling Revenue

By Douglas A. McIntyre Updated Jan 13, 6:34AM EST · Published Jun 21, 9:35AM EDT

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New York Times Tries Something New to Help Halt Falling Revenue — © Thinkstock

The New York Times Co. (NYSE: NYT) believes it has a new way to increase subscription revenue. It needs one. The newspaper company reported a 1.2% drop in revenue last quarter to $378 million, compared to the same quarter a year ago. The top line keeps shrinking, as it has for years.

The bright spot for the quarter was a 2.4% rise in subscription revenue to $218 million. Digital subscription revenue rose 14.2% to $5.2 million quarter over the quarter a year earlier. However, on a dollar basis, the increase was only $6.7 million.

According to several media reports, New York Times CEO Mark Thompson plans to launch a paid online subscription product that will carry no advertising. The decision apparently is part of a strategy to counter ad-blocking software that has eroded, and will continue to erode, online advertising revenue. Readers can eliminate advertising altogether when they visit ad-supported sites by use of this software.

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The New York Times dilemma is that as its advertising revenue falls, it must fill the hole with subscription revenue. The risk it takes with “no advertising” subscriptions is that they will be priced higher than regular online subscriptions to offset whatever advertising revenue comes from the digital pages of current, regular digital products. Will subscribers accept high prices? That is the large gamble. If the New York Times loses, it will face subscription revenue attrition.

Thompson needs to gamble. The New York Times already has hinted that it will chop more jobs as the year progresses. These will be on top of other jobs cuts, which have become routine over the years. The fear in the journalism community is that the Times will need to drop some of its coverage areas. The paper has mostly avoided that, unlike almost every other newspaper in America.

Thompson has been backed into a corner and has few options to get out.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.