The New York Times Reported a 2nd Quarter Profit — Surprising Analysts
The New York Times today announced a modest profit for the second quarter of 2009, and noted that it expects the decline of ad sales to moderate in the third quarter. Ad sales fell 27% in the first quarter and 30% in the second. Gannett, McClatchy and Media General have also reported a moderation in the tumbling of ad sales.
Profits at the Times came not from increased revenues, but from deep cost-cutting. So far this year, the newspaper and digital publishing company has trimmed $210 million from its operating expenses,,and expects to reach $450 million in cuts before the end of the year.
Meantime, the company said it is eyeing a new source of revenue: charging fees for access to its online content. Already, the Times has successfully boosted subscription rates for its flagship newspaper, which now costs about $700 a year for a seven-day subscription outside the New York metro area, according to the "Biz Blog" published by the web site of the Poynter Institute, a journalism training organization. "Circulation revenues … account for 40% of revenue for the publishing group, by far the highest share in the industry," the blog report noted. Most newspaper companies derive only 20% to 30% of their revenues from circulation.
An analyst today asked Times CEO Janet Robinson "how far can you go" before further price hikes spur too many cancellations. Robinson did not exactly answer, except to say in effect, "not yet," according to the blog.
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