Ad Revenue Falls Again at The New York Times Company
Ad revenue at The New York Times Co. declined 8.9% in the third quarter from the quarter a year earlier as print ad revenue dropped 10.9% and digital ad revenue slipped 2.2%, the company said today.
Circulation revenue, however, increased 7.4% on the strength of growing digital subscriptions and an increase in print circulation prices in the first half, which offset falling print sales. The boost in circulation revenue was nearly enough to overcome the ad drop and a 2.9% decline in other revenue: Total company revenue was down just 0.6% from the third quarter of 2011.
The company, which also publishes The Boston Globe, said it expects overall ad revenue trends in the fourth quarter to resemble the quarter just completed. Circulation revenue should increase by a percentage in the mid- to high-single digits, it said.
"While our results for the third quarter reflect continues pressure on advertising revenues, total circulation revenues rose led by the ongoing expansion of our digital subscription base," said Arthur Sulzberger Jr., chairman and interim CEO, in a statement accompanying the financial results on Thursday. "Digital subscription trends have remained robust and at quarter end, paid digital subscriptions across the Company totaled approximately 592,000, up 11 percent from the end of the second quarter."
Digital subscribers to The New York Times and the International Herald Tribune comprised 566,000 of that total, up 11% from the end of the second quarter, while The Boston Globe contributed 26,000, up 13%.
The company pegged the advertising falloff largely to "the challenging economic environment, ongoing secular trends and an increasingly complex and fragmented digital advertising marketplace" -- factors that seem unlikely to abate (although the company did say help-wanted classified ad revenue increased 4.1% from the quarter a year earlier).
The Times Co. is facing questions over incoming CEO Mark Thompson, who was director-general of the British Broadcasting Corp. from 2004 until September and joins The Times on Nov. 12. The BBC has come under fire for deciding against running an investigation into sexual abuse allegations against longtime network personality Jimmy Savile, a decision in which Mr. Thompson said he was not involved.
"His integrity and decision-making are bound to affect The Times and its journalism -- profoundly," New York Times Public Editor Margaret Sullivan wrote on Tuesday. "It's worth considering now whether he is the right person for the job, given this turn of events."
The Times Co. reported an operating profit of $8.5 million in the third quarter of this year, down 59.6% from the third quarter a year earlier. Excluding depreciation, amortization and severance costs, operating profit totaled $34 million, down 28.7%.