Peter Kafka

Recent Posts by Peter Kafka

No Matter How Hard You Squint At It, the New York Times Can’t Be a TV Company

new york times buildingThe New York Times continues to struggle with advertising. That’s not getting better anytime soon.

But the publisher has had luck getting readers to pay for the paper, which is why circulation revenue continues to rise. Last year, the Times made more money from subscribers than from advertisers.

The result, said Barclays analyst Kannan Venkateshwar, is that the Times is morphing from a traditional newspaper company into something different: A “content company,” which he compares to TV powerhouses like Disney, Time Warner, CBS and Viacom — all of which boast multiple revenue streams, strong subscription businesses and more generous valuations from Wall Street than traditional publishers receive.

Venkateshwar has been a (guarded) optimist about the Times’ future for a while. And this forecast requires some leaps of faith.

It assumes, for instance, that newish Times CEO Mark Thompson figures out a video strategy that serves both readers and advertisers — something that no other news publisher has really cracked yet. It also assumes that the Times’ conference business, which has been more or less dormant until the last year or so, kicks into high gear.

And, if all of that works, and investors buy the New York Times = Disney comp Venkateshwar is making, then perhaps the Times will see another stock-price bump.

The problem with all of this theorizing: Disney and its peers do well on Wall Street because they are charter members of the TV Industrial Complex, which means they are all but guaranteed to make piles of money, supplied by you, the pay-TV subscriber.

This could end one day, of course, courtesy of Google/Netflix/someone to be named later, but if you hold your breath waiting for that, you’re going to run out of oxygen.

In the meantime, the TV Industrial Complex is a super-exclusive club that has no intention of accepting new members. If you’re willing to spend a ton of money, you can buy a temporary pass, but you won’t get the most important membership perks.

So, no matter how good Mark Thompson is at transforming the Times into a new-fangled content machine, it’s never going to be a TV network. Hard to see Wall Street believing otherwise.

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There’s a lot of attention and PR around Marissa, but their product lineup just kind of blows.

— Om Malik on Bloomberg TV, talking about Yahoo, the September issue of Vogue Magazine, and our overdependence on Google