New York Times Co. Profit Grows Even as Print-Ad Declines Rise

Cost Cuts, Growing Circulation Revenue Help Boost Newspaper Giant

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The New York Times Company's third-quarter revenue declined 3.1% from the quarter a year earlier, the company said today, as online subscriptions helped boost circulation revenue 3.4% and ad revenue fell 8.8%. Yet the growing circulation revenue stream and cost cuts helped the company achieve a 5% increase in operating profits excluding depreciation, amortization, severance and one-time events.

Within the company's news media division, which includes The New York Times itself as well as the Boston Globe and other newspapers, digital-ad revenue increased 6.2% -- slower growth than in the second quarter -- while print-ad revenue dropped 10.4% -- a sharper decline than last quarter.

Janet L. Robinson
Janet L. Robinson

The deceleration in digital-ad revenue growth primarily reflected advertisers pulling back as the economy got "a little bit more squirrely," said Martin Nisenholtz, senior VP for digital operations, in a conference call with analysts. "We don't think there's anything fundamental about that ."

The company continued to face difficult comparisons against last year, when BP ad spending related to the Gulf oil spill contributed significantly, and suffered the effects of a weak economy, Times Co. president-CEO Janet Robinson said.

The Times put up an online pay meter in March, requiring readers who aren't home-delivery subscribers to pay to read more than 20 articles per month. The New York Times itself had 324,000 paid digital subscribers at the end of September -- including subscribers on e-readers such as Amazon's Kindle -- up from 281,000 digital subscribers across the web and e-readers at the end of June.

In addition to generating digital-circulation revenue, the meter has helped bolster home-delivery subscriptions by attracting new subscribers and giving existing customers more incentive to stay, Ms. Robinson said. The Times plans to start offering digital-gift subscriptions later this quarter, she added.

A Lincoln-sponsored promotion giving free digital access to 100,000 heavy readers will also expire at the end of the year, giving The Times a chance to convert them to paying readers. "Those are highly engaged users and we expect those people will look positively on paid subscription to The Times," Ms. Robinson said.

"We're starting to market to those people," she added.

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