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.
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.
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 company saw ad sales drop 27 percent, and the Internet no longer helps: Web ad sales were down 6.1 percent. The company says to expect more of the same, for a while.
No shock that the Washington Post had a miserable fourth quarter. 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 paper of record provided a helpful peek into its business–and the ad business in general–during its earnings call yesterday. It’s not all bad news, and it’s all pretty interesting. Here’s the CliffsNotes version.
Earlier this month, executives at the paper warned investors that they had a miserable November. They weren’t kidding. Ad revenue was down almost 21 percent, and even Web ads shrank.
The Times says its core Web ad business–selling display ads on its pages–fell off in November, has gotten worse this month and could really be in trouble next year. But About.com is holding up comparatively well.
The New York Times has slashed its dividend by nearly $100 million a year. But that won’t be enough to save the paper with results like these: October’s report card shows that the paper’s core business is continuing to shrink–and that the Internet, where the paper has been investing substantial resources, isn’t coming through, either.
The New York Times 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.
Peter Kafka has been covering media and technology since 1997, when he joined the staff of Forbes magazine. Most recently, he has been the managing editor of the tech and media Web site, Silicon Alley Insider.
Here is a statement of my ethics and coverage policies. It is more than most of you want to know, but, in the age of suspicion of the media, I am laying it all out.
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