mikolas

Print Media Sales Revisited – The New York Times Company

The New York Times Company reported their Q1 earnings and the situation seems to be, with one word, abysmal. Not only did the print advertising sales free fall compared to Q1 2007, but also online advertising only grew in mid-teens, 16% to be exact, with 11% y/y growth for all the online operations. Even more alarming, the slowly growing online revenue totaled 11.1% of the total revenue against 9.5% a year earlier so it seems to be a double jeopardy: slowly growing online having more impact on the bottom line and negative growth in the print advertising. This is not good for the company and I think at least some analysts agree.

It is too early to jump into conclusions and blame the economy as online advertising, including online classifieds, is steadily growing despite the weak economy. My intuition tells that this is the real tipping point for advertising in general and online is really starting to eat revenue from domestic newspapers, and in NYT’s case also from regional publications. And the explanation is quite simple: online advertising reaches domestic audiences, yet is targetable by demographic and above all is still quite cost efficient. Mix in some CPC/CPA and the combination simply is quite attractive, compared with traditional print advertising. Times they are a changing.

EDIT: Google Q1 results seem to confirm my intuition. According to Silicon Alley Insider “…the company has not seen any macro-economic impact.” And the stock went up $75 in aftermarket trading.