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The New York Times Sells 100,000 Digital Subscriptions In Three Weeks

Peter Kafka — Thu, 21 Apr 2011 12:55:45 +0000

The New York Times says digital subscriptions “have surpassed 100,000″, less than a month after the publisher put up its Web paywall.

Is that good? Bad? Make your own guess. Times PR boss Bob Christie, says that number doesn’t include free starter subscriptions offered to some readers, via Lincoln. But he says it does include launch promotions which offered a four-week trial for $0.99.

If all of those subs stick around for a year, that’s at least another $19.5 million in revenue for the paper. But that’s a big “if.”

Here’s the Times’ take: “So soon after the launch, the Company does not yet have visibility into conversion and retention rates for these paying customers after the initial promotional period, although early indicators are encouraging.”

The rest of the paper’s numbers are OKish, for a big print publication: Revenues are down 3.6 percent, with ad revenue down 4.4 percent and circulation dollars down 3.7 percent.

The Times’ digital story is a bit of a mixed bag. The publisher’s media group saw digital ad revenue increase 14.9 percent, but revenues at About.com, which have been a big component of its Web business for years, dropped 10.2 percent, and operating profit at About dropped 13.9 percent.

The Times lays some of the blame at Google’s feet: “Design changes in cost-per-click advertisements served by Google had a negative effect on click-through rates in the quarter, and the Company expects that to be the case through the second quarter of 2011. The About Group also experienced a moderately negative impact on page views from the algorithm changes Google implemented in the quarter.”

Do You Want To Save Your Web Ads? AdKeeper Bets $35 Million That You Will

Peter Kafka — Mon, 03 Jan 2011 05:01:05 +0000

Want to save and store your favorite Web ads? AdKeeper thinks you do. And now the startup has convinced investors to make a huge bet on the concept, too: The company, which has yet to launch, has raised $35 million in a round led by Oak Investment Partners.

Add that to the $8 million AdKeeper rounded up earlier in 2010 from investors including DCM, Spark Capital, First Round Capital, and the New York Times, and you get a sense of the ambition involved here. CEO Scott Kurnit thinks he’ll end up creating a new kind of advertising platform — if Internet users cooperate.

The concept is pretty simple: Web visitors click on ads they like, and store them in a digital locker so they can check them out later. Advertisers will pay AdKeeper a premium.

If it works, it could be huge, but that assumes consumers play along. More than that, really: AdKeeper expects consumers to change their behavior, and start embracing Web ads instead of ignoring them.

Google works brilliantly because it can show searchers relevant ads. But the overwhelming majority of Web surfers ignore conventional display ads — the kind that AdKeeper wants to work with. So who’s going to save ads they’re not looking at in the first place?

Kurnit’s short answer is that he expects marketers to start making ads people will want to hang on to. For a longer answer, check out this AdAge interview. He’s an excellent salesman, and does a good job of banishing the CueCat comparisons I keep thinking of. For now.

This is normally the part in a funding story where a startup talks about its impressive growth in users/traffic/ad impressions or something. But AdKeeper can’t do any of that, because it’s not on any ads yet. Kurnit says that should happen by mid-February.

Instead, the company points to a long list of advertisers, like Pepsi and AT&T, that have said they like the idea. It also points to market research it commissioned which it says shows a majority of Web users would like to save their ads.

And perhaps the company’s biggest selling point is Kurnit, who built About.com during the first Web boom and sold it to Primedia for $700 million in 2001. The company, a forerunner to Web story mills like Demand Media, ended up at the New York Times, where it still makes up a big chunk of the paper’s online business. And its success made Kurnit wealthy and well-respected.

How well-respected? Enough to round up endorsements from people who might not be convinced about AdKeeper, but like its CEO quite a bit.

Here’s the response I got from a member of Kurnit’s advisory board when I asked them to explain AdKeeper to me: “Not sure I get it myself. But I love Scott!”

Ad Dollars Shrink at the New York Times, Again

Peter Kafka — Tue, 19 Oct 2010 12:48:57 +0000

Three months ago, the New York Times seemed to have halted its advertising skid after a very long slide.

Perhaps it has started up again. Ad revenue dropped one percent during Q3: Digital revenue jumped 14.6 percent, but that wasn’t enough to counter a 5.8 percent drop in print ads–which CEO Janet Robinson had thought would move up again this quarter. This morning, though, she cited “uneven economic conditions” and “marketplace volatility.”

Meanwhile, circulation revenue dropped 4.8 percent, and the company’s overall revenue sank by 2.7 percent.

The Times isn’t terribly optimistic about the fourth quarter: It thinks prints ads may improve “modestly,” while digital will grow by 10 percent, which is a deceleration from both this quarter as well as the previous quarter’s 21 percent growth rate.

Here’s the full breakout for the Times’ digital properties (NYT.com, About.com, etc), which appear to be doing pretty well:

Total Internet revenues increased 13.3 percent to $89.4 million from $78.9 million.
Internet advertising revenues increased 14.6 percent to $78.3 million from $68.3 million.
Internet advertising revenues at the News Media Group increased 21.6 percent to $47.4 million from $39.0 million, mainly due to strong growth in national display advertising.
Internet businesses accounted for 16.1 percent of the company’s revenues for the third quarter of 2010 versus 13.9 percent for the third quarter of 2009.

Meanwhile, the Times doesn’t have anything new to say about its plan to move its main Web site to a “metered model” pay wall next year. Perhaps we’ll hear something about it during the 11 am earnings call.

Ad Sales, Pay Walls, and Absolutely Nothing About iPads at the New York Times Earnings Call

Peter Kafka — Wed, 10 Feb 2010 16:01:05 +0000

The New York Times said things got better–or, if you like, no worse–during the last quarter of 2009. But investors are disappointed that the publisher isn’t more optimistic about 2010, and they’re pushing shares down this morning.

Let’s see if the paper’s executives can turn that around during their earnings call. We’ll also be looking for any updates the Times can provide on its pay wall plans, and, of course, its role in the launch of the Apple iPad.

UPDATE: As I noted below, though the New York Times (NYT) was a featured partner at the launch of Apple’s (AAPL) iPad, even sending a small team to Cupertino to create an app a few weeks before the event, there was zero discussion about iPads today.

CEO Janet Robinson made a generalized comment about the growth of the Times’s mobile distribution, but that was it. And not a single analyst showed any interest in this stuff–a good reminder that neither the Times nor Wall Street expects the iPad to be material to the company’s business for quite some time.

Liveblog

On the call: CEO Janet Robinson, CFO Jim Follo, Times Media Group boss Scott Heekin-Canedy, and Digital boss Martin Nisenholtz

In a preamble, CEO Robinson highlights cost-cutting, balance sheet repair, and asset sales (radio station, but not the Boston Globe; the company is still looking at selling its stake in the Boston Red Sox–the process is “complicated” and is “taking longer than anticipated”).

Robinson recaps the pay wall plan, metered approach, etc. Nothing new here so far.

The paper is waiting until 2011 to deploy the pay wall, she explains, because it wants to make “subscribing as smooth and easy as possible….It will take some time to build, deploy and test the best systems.”

Robinson offers a few revenue details, primarily a recap of the earnings release.

Ads by category: National ads down 12 percent, retail down 23 percent, classifieds down 27 percent.

News media online grew four percent, primarily from display advertising (the rest of online growth comes from About.com).

Print ad category decreases came from Hollywood, among others. Ad category increases: Print auto, health care, packaged goods.

Circulation revenue is up because of newsstand, price increases. The Times is benefiting from declines at other papers, because as local papers cut back, it is offering more info than ever. Robinson notes expansion by the paper into local news in the Chicago and San Francisco markets, adding that there are plans on going local in “several” other key markets

Time to brag about new mobile products and applications. The paper counted 75 million page views from mobile and apps in December, and the iPhone app has been downloaded three million times since launch.

Back to digital: Display ads are up, classifieds down; they improved “significantly” as Q4 progressed.

About.com is still the Times’s digital cash machine: Revenue is up 22 percent, and operating profit grew from $10 million to $18 million.

Overall, Internet businesses are up 10 percent and accounted for 15 percent of revenue for the quarter. Online advertising revenue accounted for 23 percent of ad revenue of the quarter.

“Limited” visibility for 2010, which is what’s upsetting The Street, supposedly. But the paper is still “realigning” its cost base.

CFO Jim Follo’s comments may not interest all readers except for this part: The Times is continuing to reduce headcount, he notes, which dropped by 18 percent in 2009. The company is also looking at the benefit structure for both employees and retirees. It froze that awesome supplemental retirement plan that pays certain retirees a very lucrative pension.

We’ve been benefiting from a drop in newsprint prices last couple years, Follo notes, though suppliers are trying to raise prices again, but there’s a supply glut, so we think they’ll have a tough time doing that.

No big capital spending projects are planned. [Presumably, the pay wall is not that expensive to build.]

[Aside: Interesting that NYT.com GM Denise Warren, who's normally on these calls, isn't on today's.]

Questions and Answers

Question: More color on advertising, please.

Scott Heekin-Canedy: We have some optimism, but advertisers are “guarded,” and ads are still bought–or retracted–at the last minute, as they were last year.

Tech, media, health care, and auto ad categories all look promising. The mix is “definitely different” from last year “when it seemed like every single category was down.” Now, many categories are showing “flat to significant growth.”

Question: Are you still optimistic that you can reach a deal on the Red Sox?

Robinson: “Yes we are.” Lots of due diligence, lots of different properties (stake in team, stadium, network, etc.).

Q: What are incremental costs of setting up a pay wall?

Robinson: “We feel this is an elegant solution,” but we want to wait the year and make sure we’re well prepared, etc. Again, integrating home delivery and digital is crucial.

Nisenholtz: Regarding cost, there will be a “modest operating cost” to deploy the tech. We’re hiring a “handful” of people to do that and deploying “modest” capital, but it’s not material.

[Apology: I missed a question on ad categories, though it seems to reprise the earlier question.]

Q: Can you give us a sense of additional cost-savings you can extract this year?

Follo: Nope.

Q: Will your headcount go down again in 2010?

Follo: Yes.

[Missed another question here.]

Next a question about the tax rate, which I can’t imagine anyone reading this cares about.

Q: Can you tell us more about January ad trends, i.e., how much is national vs. local?

Robinson: We won’t break that out (anymore).

Q: Was it materially better than Q4?

Robinson: She repeats her earlier comments from the release. “Very good performance” on the digital side of business. December was particularly good, but we’re not going to be more specific about January.

Heekin-Canedy: That said, we don’t think January is much of an indicator about the rest of the year, anyway. Different beast, not much connection between December [when people were dumping leftover dollars].

[There's a giant disconnect between analysts and the chattering classes here. If the latter ran the call, this would be about nothing but iPad, iPad, iPad. But we're 48 minutes in, and zilch so far. Which is a good reminder: No matter what launches with the tablet this year, this stuff isn't going to have a big impact on Big Media for quite some time.]

Q: Where is growth coming from at About.com?

Robinson: Both consumer packaged goods and display ads. We’ve upgraded the sales channel to go after display and that’s helped a lot.

Nisenholtz: Strong categories include CPC, travel, education and financial services. There’s also retail strength.

Q: Are CPGs new to About.com?

Nisenholtz: Yeah. Well, not exactly. It’s a big site, lots of reach. But we’ve updgraded the sales team and the increase there is part of the payoff. We reach a lot of moms. The Web site skews female.

Q: You may end up paying $60 million to $80 million back into the pension plan. When could that come? Q4?

Follo: Could be sooner than that. We’re in a good position regarding liquidity.

[The final question is about joint ventures that you don't care about.]

And that’s it for the call.

New York Times Says Print Ads Getting Less Bad, Web Ads Bouncing Back

Peter Kafka — Tue, 08 Dec 2009 15:04:42 +0000

A little holiday cheer from the New York Times (NYT), which says things are getting less miserable than they have been for the publisher.

This is all relative, of course: The publisher says Q4 prints ads are likely to be down 25 percent, which would be a bummer just about anywhere but the newspaper business. But last quarter, print was down 31.2 percent, and overall ad revenue was down 26.9 percent, so an improvement is an improvement.

The uptick at the Times’s digital business, however, looks more straightforward. CEO Janet Robinson says online ads will be up 10 percent this quarter, a big turnaround from last quarter’s 8.2 percent decline.

Robinson says that both the paper’s display ads, as well as its About.com content mill, are improving, but didn’t spell out the performance for each unit. Last quarter, About.com was already turning around, having posted a 7.2 percent revenue bump. But traditional Web advertising was down 18.5 percent.

None of the improvements, though, will be enough to prevent the Times from having to hack away at its cost structure. The publisher’s flagship paper is cutting 100 newsroom positions and will spend $50 million on severance charges this year.

Hot Potato Is Ready to Eat: Do Twitter, Facebook Users Want Another Real-Time Chatter Service?

Peter Kafka — Wed, 25 Nov 2009 15:25:03 +0000

Last month I told you about Hot Potato, one of the buzziest start-ups in the very buzzy “real time” sector. Now you can check out the service yourself. But not really.

The New York-based service opened its doors last week, but it won’t really kick into gear until Apple (AAPL) signs off on its iPhone app, and that’s taking a bit longer than the company expected. Founder Justin Shaffer still thinks he’ll be up and running on Apple’s platform in a few days, but until then, you can check out this video interview I shot with him yesterday, where you can get a sense of how the app will work.

[ See post to watch video ]

Or if you’re impatient, here it is in a nutshell: The service is supposed to let users converse in real-time about “events”–whether a football game, business conference or maybe even a really good house party.

You can already do that on Twitter and Facebook, but the pitch is that Hot Potato will help “curate” the chatter, so you will end up talking to both your friends and interesting people you don’t know–and that’s something Twitter and Facebook don’t do well right now.

If it works, there are some obvious advertising/sponsorship opportunities available for the service: The NFL could sponsor chatter about its games, for instance. Or someone who isn’t related to the football league could sponsor chatter about the games–since this is user-generated content in its purest form, Hot Potato isn’t required to get the go-ahead from anyone before it creates a conversational stream.

In any case, Hot Potato now has a pile of money to help it figure this stuff out. Last week, the company closed its first funding round of $1.4 million (I had originally reported that it was raising “about $1 million”), and in addition to VC backers First Round Capital and RRE Ventures, the start-up has an array of high-profile angel investors who have pitched in.

Here’s the roster: Super-angel investor Ron Conway; real-time start-up incubator Betaworks; Huffington Post co-founder Ken Lerer and his son Ben Lerer, who runs Thrillist; New York Observer owner Jared Kushner and his brother, Josh Kushner; ZelnickMedia’s Strauss Zelnick; Hunch and Founder Collective co-founder Chris Dixon; About.com co-founder Scott Kurnit; Facebook executive (and Apple vet) Dave Morin; Boxee’s Zach Klein; angel investor Allen Morgan; and entrepreneurs and investors Scott and Cyan Banister.

New York Times Delivers Some Not Terrible News: Earnings, Ad Sales Better Than Expected

Peter Kafka — Thu, 22 Oct 2009 12:05:36 +0000

The New York Times announced plans to cut eight percent of its newsroom payroll this week, citing “economic thunderstorms,” which suggested that this morning’s earnings results were going to be particularly unpleasant.

Surprise! They’re not that awful, at least by the diminished standards of the newspaper industry:

Excluding one-time charges, the publisher earned 16 cents per share on revenue of $570 million. Analysts expected the Times (NYT) to lose a penny per share on revenue of $561 million.

Ad revenue declined 26.9 percent, which is unpleasant but better than the previous quarter, when it dropped 30.2 percent. Internet revenue dropped by 7.2 percent and Internet ad revenue was down 8.2 percent. Both of those results are improvements over the previous quarter as well: Last quarter, Internet revenue was down 14.3 percent and Internet ad revenue was down 15.5 percent.

Some cautious optimism from CEO Janet Robinson:

Looking ahead, visibility remains limited for advertising in the fourth quarter. But as is the case across the media sector, we have seen encouraging signs of improvement in the overall economy and in discussions with our advertisers. Early in the fourth quarter, print advertising trends, in comparison to the third quarter, have improved modestly, while digital advertising trends are improving more significantly.

A little more color on digital: The big improvement this quarter was driven by a turnaround at the Times’s About.com content mill: Revenue was up 7.2 percent, way up from the 5.1 percent decline posted in the previous quarter. This makes sense, given that About is driven by pay-per-click ads and these have come back across the industry, led by Google (GOOG).

But the story is less impressive at the Times’s traditional Web sites. Ad revenue there was down 18.5 percent, which is better than the 21.6 percent drop the previous quarter, but nothing to write home about. As it has done in previous quarters, the publisher blames the decline on a drop in online classifieds, and I assume that much of the drop stems from vaporized employment ads. If this is the case, it’s going to be hard to move those numbers significantly for quite some time.

Rise of the Machines: Why Demand Media Is Worth More Than the New York Times

Peter Kafka — Tue, 20 Oct 2009 10:00:04 +0000

The New York Times’s model for content creation, which revolves around well-paid professionals who rely on their experience and judgment, looks increasingly threatened. What does a new model look like? Perhaps one where a computer spits out assignments to day laborers who work furiously for low pay.

That’s the worrisome conclusion you can draw from Dan Roth’s excellent profile of Demand Media in the new issue of Wired. The piece is well-worth reading, but here’s the very short version: Demand has figured out how to generate a massive stream of low-cost stories designed to extract the maximum dollars from Google’s (GOOG) advertisers.

The company has plenty of competitors that do similar stuff–Associated Content, Mahalo, and About.com, owned by the New York Times (NYT)–but Demand’s secret sauce is an algorithm that helps it figure out the most valuable stories to assign, based on search terms and keyword prices. Which leads to stories like “Where can I donate a car in Dallas?”

Demand currently produces about 4,000 new stories a month, paying the freelancers who create them between $15 and $20 a piece. But CEO Richard Rosenblatt wants to up that to a million per year. At that point, Roth notes, “the payouts could easily hit $200 million a year, less than a third of what The New York Times shells out in wages and benefits to produce its roughly 5,000 articles a month.”

Which is why Demand is constantly floated as a potential acquisition candidate for the likes of Yahoo (YHOO), at price tags of $1.5 billion or more. Investors, who bid up Times stock a bit after the company announced plans to cut its newsroom headcount by eight percent, currently value the publisher at $1.3 billion.

All of that make you queasy? Then you’re going to hate reading paragraphs like this:

Here is the thing that Rosenblatt has since discovered: Online content is not worth very much. This may be a truism, but Rosenblatt has the hard, mathematical proof. It’s right there in black and white, in the Demand Media database–the lifetime value of every story, algorithmically derived, and very, very small. Most media companies are trying hard to increase those numbers, to boost the value of their online content until it matches the amount of money it costs to produce. But Rosenblatt thinks they have it exactly backward. Instead of trying to raise the market value of online content to match the cost of producing it–perhaps an impossible proposition–the secret is to cut costs until they match the market value.

I think there’s an equally worrisome story–worrisome, that is, from the admittedly self-interested perspective of content creators like me–about the pressure from advertisers, armed with their own technology, to push the value of online content down even further. But we’ll save that for later. One downer a day is plenty.

Want to know what the face of new media looks like? Here’s a 2008 interview Kara Swisher conducted with the preternaturally peppy Rosenblatt:

[ See post to watch video ]

More Pulitzers, Less Money: New York Times Ad Sales Down 27 Percent; Q2 Looks Just as Bad

Peter Kafka — Tue, 21 Apr 2009 12:51:16 +0000

Yesterday the New York Times won five Pulitzer Prizes, and executive editor Bill Keller took a well-deserved victory lap with a speech that reportedly had his newsroom in tears.

But for better or worse, none of that matters to investors, who are trying to figure out what the company’s long-term prospects look like. In the near term, they look terrible.

In the first three months of this year, the New York Times Company (NYT) lost $74.5 million, or 34 cents a share once you factor out one-time charges, on revenue of $609 million. That’s worse than Wall Street’s low expectations of a five-cent loss on revenue of $630.8 million.

The reason, of course, is that the ad market is miserable in general, and even more so for newspapers. The company’s ad revenue was down 27 percent, notably worse than the awful 17.6 percent decline the Times recorded in the last quarter of 2008.

And as in the last quarter, former bright spots like the Internet business have now gone dark as well: Internet revenue was down 5.6 percent, Internet ad sales declined 6.1 percent, and revenue at the Times’s About.com unit dropped 4.7 percent.

Expect more of the same for the second quarter of this year, warns CEO Janet Robinson: “At this time, and it is early in the quarter, we believe the rate of decline in ad revenues in the second quarter will be similar to that of the first.”

The Times has been trimming costs (via salary cuts and layoffs) and has bought itself a bit of breathing room by getting rid of its dividend, taking on a very expensive loan from Mexican billionaire Carlos Slim and selling off assets like its Manhattan headquarters. It still has some moves it can make–it is trying to unload its stake in the Boston Red Sox and to find a buyer for the Boston Globe.

But at some point it’s going to have find a way to start selling more ads again. Because awards alone won’t save the paper–Pulitzers can’t even guarantee their winners’ continued employment.

The Times has stopped providing monthly revenue updates, but it has been pretty good about providing detail via its earnings calls. I’ll be on the road during today’s 11 a.m. call, but will check the transcript and get back to you later with the most interesting nuggets.

Upside at the Washington Post: At Least Web Ads Didn't Disappear Last Quarter

Peter Kafka — Wed, 25 Feb 2009 14:58:11 +0000

At this point you need to be a skilled relativist to find something positive to say about the newspaper business. Last fall, for instance, executives at the Washington Post Co. (WPO) could argue that while their flagship newspaper had a lousy third quarter, it represented an improvement over their second quarter, which was abysmal.

But that won’t work for the company’s fourth-quarter results since those show yet more weakness in its print businesses. So here’s some upside: At least the paper’s online business didn’t fall off a cliff in Q4–which is more than you can say about the New York Times.

The numbers:

Newspaper division revenue was down 13 percent; the previous quarter it declined a mere seven percent.
Print advertising declined 21 percent; that’s worse than the 14 percent decline the previous quarter.
Revenues at the company’s magazine group were down 18 percent; in Q3 they were down a mere four percent. Newsweek’s revenue dropped 22 percent, and that decline will continue as the company pares back its circulation base.
The good news I promised? Online revenue was up five percent, and display ads were up 10 percent. Both of those numbers represent decelerations from Q3, when overall online revenue was up 13 percent and display was up 32 percent. But that’s better than the folks over at the Times, who saw online ads shrink altogether in Q4.

Why would the Times see online revenue fall off a cliff while the Post only saw growth slow? I’m open to suggestions: The most obvious one is that the Times has much more national exposure than the Post (both companies also have regional papers in the mix, and the Times’s results include its About.com unit). But if anything, you’d think that disparity would benefit the Times. Anyone else want to weigh in?

The New York Times Says Energy Companies Are Advertising, Hollywood Isn't

Peter Kafka — Thu, 29 Jan 2009 14:10:46 +0000

As I noted yesterday, the New York Times is going to stop providing monthly updates on the state of its business, which is a bummer but also understandable. But company execs do seem willing to discuss their business in detail during the quarterly earnings calls, which is extremely helpful.

Yesterday, for instance, the New York Times (NYT) provided a wealth of information about the state of the ad business. Here’s a summary, with an assist from Seeking Alpha, of stuff I found interesting:

What kinds of companies are still buying ads? Corporate advertisers like energy companies and financial companies–those that haven’t gone bust–trying to reassure customers; advocacy groups trying to influence the new administration.

Who’s cutting back? Hollywood: Fewer movies released, and less marketing money put behind each release (though that will change during awards season this spring); telcos, because there’s less growth out there; books, for obvious reasons.

Classified ads are killing us. Above and beyond anything else, the newspaper business is dying because its super-lucrative classified ads business is (still) dying. Technology, in the form of competition like Craigslist, critically wounded classifieds, and now the economy is finishing it off. The dropoff in the help-wanted category accounted for half of the the Times’s digital decline in Q4, said digital exec Martin Nisenholtz.

NewYorkTimes.com is a meaningful brand for display advertisers. Other properties–like About.com–aren’t. Nisenholtz says ad rates at NYT.com actually increased for most of the year. But About.com, which had been the company’s star digital performer, fell apart at the end of the year because of its display ad business–there’s nothing about the site’s brand or audience that commands a premium from display advertisers. The paper is now redesigning About.com to emphasize cost-per-click ads–that would be ads from Google (GOOG), primarily–because there’s still growth there.

Perhaps as much as 50 percent of the company’s digital inventory is sold by ad networks In response to a question, Nisenholtz wouldn’t put out an exact number. But he came close: “I would say that from an industry-wide perspective, you are probably looking today at around 50 percent. Some of our properties are above that, some of them are below that, but that’s about where the industry is at this point.”

New York Times: November Was So Terrible, Even Our Internet Ads Were Down

Peter Kafka — Wed, 24 Dec 2008 14:05:41 +0000

Earlier this month, executives at the New York Times (NYT) warned investors that they had a miserable November. They weren’t kidding.

The grim details are here, but I’ll save you some time:

Revenue was down 13.9 percent, an acceleration from October’s 9.4 percent drop.
Ad revenue was down 20.9 percent, an acceleration from October’s 16.2 percent drop.
The really awful news: Internet ad revenue and overall Internet revenue actually declined in November, down 3.8 percent and 2.6 percent, respectively.

In the good old days of 2007, the Times could at least say that while print revenue growth was slowing to a halt, Internet ad sales were growing quickly. By last month, the best thing you could say about Internet revenue at the Times was that it was still growing a little bit. Now that’s gone, too.

For the record, the Times says that it was still able to register “moderate” display ad growth at its newspapers, but that its online classifieds and real estate ads had gotten crushed, for obvious reasons. And over at About.com, which until now has been the bright spot on the Times’s financials, display ads shrank, wiping out out “moderate” growth in cost-per click ads.

And expect more of the same in December and in 2009. Martin Nisenholtz, the Times’s digital boss, has already warned investors that the “softness in November” would “accelerate into December” and that “next year is going to be a different year, by a fairly profound margin.”

Per usual, the one bit of good news in the Times’s numbers is that its readers continue to value its publications enough to pay for them: Circulation revenues increased 4.2 percent. But if the Times can’t convince advertisers to pay, too, that’s not going to matter. Happy holidays!

New York Times: Our Digital Ads "Could Be Under Great Stress"

Peter Kafka — Tue, 09 Dec 2008 21:20:18 +0000

A glum quartet of New York Times (NYT) executives appeared at the UBS media conference today to repeat what they had already said via press release this morning: Business is grim, but we’re sure we’ll be OK. Also, anyone want to lend us money?

There was just a glimmer of news at the event, though it wasn’t surprising or pleasant: The Times’s Web business is falling away, day by day.

Digital head Martin Nisenholtz said revenue at his unit had been OK until the last two months of the year, but that there had been “softness in November, accelerating into December…next year is going to be a different year, by a fairly profound margin.”

Bear in mind that the Times’s digital performance pre-November was grim to begin with–digital revenue grew just 4.3 percent in October–and it becomes possible to imagine that digital revenue will decrease for at least part of 2009.

Nisenholtz didn’t do anything rash like attach any numbers to his comments, but he did add a little bit of color: His About.com unit, which is boosted by cost-per-click/search ads, is still doing OK-ish. But the business of selling display ads to Times Web sites is getting pummeled, and could be “under great stress” next year, he says.

So if About.com is doing (comparatively) well, why not sell that asset to help the paper escape its cash crunch? I asked CEO Janet Robinson that question after the event. She did everything but insist that the paper would never part with About.com, and praised it up and down–“an extremely important part of our digital future,” etc.

But given a couple chances to do so, she never explicitly ruled out a sale. Given the paper’s position, I don’t think she can.

[Image Credit: 1962 NYC Newspaper Strike photo from Life/Google archive)

Why The Times Cut Its Dividend: Revenues Shrank Again in October

Peter Kafka — Fri, 21 Nov 2008 12:54:57 +0000

The New York Times (NYT) has slashed its dividend by 74 percent, which could save it nearly $100 million a year. The cuts will cost the Sulzberger family, which controls the paper and has been receiving some $25 million a year in dividends, more than $18 million.

The move is one of several the paper is going to make if it’s going to service its $1.1 billion debt load. It is also “re-evaluating assets” (i.e., looking for spare parts to sell), and while it has told its editorial staff that it will try not to fire anyone, it couldn’t make an ironclad promise.

That’s because the paper’s financial results continue to decline, and there doesn’t seem to be any light at the end of the tunnel. Even the promise of the Internet, where the paper has been devoting substantial resources and effort, is dimming.

The newest numbers, released yesterday: Revenue at the company decreased 9.4 percent in October, which is an acceleration from September, when revenue dropped eight percent. Ad revenue dropped 16.2 percent, compared to a 13 percent drop in the previous month.

And while the paper’s digital side is still growing, it’s growing much more slowly: Internet ad revenue grew just 5.3 percent, down from 16.4 percent in September; total Internet revenue, including the company’s About.com unit, was up 4.3 percent, down from 11.7 percent.

Is there any good news? Just a sliver: The Times’s readers still value the paper. Circulation remains steady, but circulation revenue continues to creep up. It bumped up 3.9 percent last month, up from three percent growth in September. But it doesn’t matter how loyal the Times’s readership is if the company can’t pay its bills. Expect more turmoil ahead.

[Image Credit: Joe Shlabotnik]

Is The New York Times Selling About.com? No.

Peter Kafka — Mon, 03 Nov 2008 22:52:33 +0000

The New York Times (NYT) is in lousy shape, so it needs to sell off About.com, the kind-of-portal, kind-of-blog-aggregator it bought from Primedia in 2005. So says Jason Calacanis, whose Mahalo.com is a kind-of-portal, kind-of-blog-aggregator.

Not true, say two people familiar with the Times and About; they say the paper isn’t shopping the property.

Calacanis, who made the remarks during the most recent This Week In Tech podcast, doesn’t go into much detail about his claim. Gawker has a link to the audio, but here’s the relevant transcript, in its entirety:

They’re going to have sell About. They’ve been trying to sell About.com, from what I understand.”

NYT spokeswoman Catherine Mathis offered up the standard we-don’t-comment-rumors-and-speculation line.

That said, it doesn’t mean it couldn’t happen at some point in the future. The Times really does need money, and since About.com is both growing and profitable, it may be the most valuable asset the Times now owns.

But that’s exactly why the New York Times would be reluctant to part with it. Like it or not, About.com may well represent the Times’ future.

This isn’t the first time a Web reporter has suggested that About.com is on the block, by the way. I wrote the same thing earlier this year, and I was wrong then.