NYTimes Now Makes More Money From Readers Than From Advertisers… But Mostly Because Advertisers Are Fleeing

from the rebalancing? dept

Some are making note of the fact that, for the first time, “circulation revenue” is higher than advertising revenue for the NY Times. Of course, it appears that much of this is due to a sharp drop in ad revenue. That’s not to say there hasn’t been an increase in circulation revenue — which includes both print and digital. The NYT raised print prices, and it didn’t seem to scare people off that much. And it’s continued to sign up people to its not-really-a-paywall. It’s so easy to get around the paywall that, at best, it should be considered a nagwall for a donation — with many people happy to pay something.

Still, one has to wonder if some of the softness in the ad side of the business is caused by the fact that there’s this nagwall that can sometimes get in between readers and the site. It certainly could be limiting advertisers’ willingness to sign onto campaigns. And, there are still significant questions about the sustainability of the NY Times in its current structure. Because there’s still this bottom line: for the second quarter, the company had an operating loss of $143.6 million. We can argue all you want over paywalls vs. advertising and whether or not one side is up or one side is down, but if the company isn’t make money, the whole system has to be in question.

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Comments on “NYTimes Now Makes More Money From Readers Than From Advertisers… But Mostly Because Advertisers Are Fleeing”

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Anonymous Coward says:

” We can argue all you want over paywalls vs. advertising and whether or not one side is up or one side is down, but if the company isn’t make money, the whole system has to be in question.”

The real problem isn’t “does a paywall work”, that is a red herring in this. It’s really a question of the cost to operate a news organization versus what the public appears ready to pay.

That gap is what makes you wonder how news will be reported in the future. Clearly it’s something that is too expensive to be supported by the current mooch mentality crowd.

Anonymous Coward says:

Re: Re:

No, “The cost to operate a news organization” is the real red herring here. If they didn’t charge fantasy prices for their fantasy ads, they wouldn’t need so many millions. Oh that’s right, I forget. The primary point of news these days is to make money in an ever rising margin, for their CEO’s and ‘benefactors’, not actually, you know, report the news. God forbid Murdock and Turner lose a few yards on their yachts this year.

Anonymous Coward says:

Re: Re:

That gap is what makes you wonder how news will be reported in the future. Clearly it’s something that is too expensive to be supported by the current mooch mentality crowd.

Are you serious? I’m pretty sure if the NYT and every other newspaper in the country closed shop tomorrow, we’d still get the news thanks to this little thing called “the internet.” It all comes down to supply and demand. The supply of news has over-saturated the market. The demand is there as always, but supply is outstripping it.

Anonymous Coward says:

Re: Re: Re:

What you are missing is that the “NYT and every other newspaper” is also the source material for mnay sites on the internet. Wire services (AP and the like) are often using stories written first by more local papers, and then syndicated on their network. Even if you don’t see AP’s name on it, they likely had a hand in it, their story being the root for things.

Go look at a scraper news site like the Drudge Report (one of the first). Close to half the site is newspaper sourced articles (direct) and many of the others are using newspapers / wire services as THEIR sources.

How often does Techdirt have stories based on what was in a newspaper first? Much of it, actually. “According to the New York Times” is a common phrase here.

Anonymous Coward says:

Re: Re: Re:4 Re:

It’s telling that you can come up with a quick, pat answer, but can’t actually back it up with anything.

I don’t look at it in dollar terms, jackass. I look at it in terms of what it is costing them to offer the service they are giving. Given a similar service, do you not expect similar costs?

Oh, now, if you are going to turn reporting duties over to “the guy on the corner” and write your international stories by watching CNN, I guess it’s all okay.

People like you never cease to amaze me – an answer for everything, and no answers at all – except pat bullshit.

PaulT (profile) says:

Re: Re: Re:5 Re:

4 paragraphs, 2 consisting of nothing but an attempt to attack me, one consisting of a blind assumption I’ve never stated and another proving the point I was trying to make, all while acting like a smug belligerent asshole – and then accusing me of giving a “pat answer”! Bravo. Your childish ways are endless, it seems.

Anyway, to answer whatever point you seem to imagine you have: Your only comment relating to the value of the NYT was its costs. Like so many things you say here, you mistake high costs for high quality, even though the opposite is often true. You said nothing about the many other values, just the dollar amount.

Then, proving the second part of my comment, you say the following:

“Given a similar service, do you not expect similar costs?”

No, I don’t. It’s highly possible to cut costs, especially if you did the thing you seem so petrified off (killing the physical print version). Organisations like the NYT have a great legacy, but with those come legacy costs and institutional outdatedness. Given the same access to resources such as local knowledge, high standard reporters and the other non-monetary assets the NYT must have, there’s definitely room for a player to offer the same service for less.

You make your usual idiotic hyperbolic comparison (yes, there is a middle ground between newspapers and copying things down from the TV), but the fact is that it would be possible to offer the same quality for less.

The other general point is that people don’t pay for news anyway. Sure, you had to buy newspapers at one point but the cover price didn’t cover the costs. Most of us read or have read news for free – be it a newspaper in a cafe or shared with a friend, TV, radio, etc. In Europe, at least, there’s a booming market in free newspapers, and the 4 papers I tend to read most regularly are freely distributed. People expect the same online, and it’s down to business models to meet the costs. If the NYT can’t meet its costs with the realities of the marketplace, maybe another player will – and prosper.

John Fenderson (profile) says:

Re: Re: Re:3 Re:

I still feel like there’s an apples-and-oranges thing going on here. I don’t see how your examples of sites that rely on mainstream “news” sources demonstrate your point that the internet isn’t a great source of fresh news.

However, on that latter point, you’re right — the internet isn’t a great source of fresh news. That it’s better than the established “news” sources (and I think that’s a supportable assertion) merely shows how truly awful the established sources are. And why would people pay money for that?

John Fenderson (profile) says:

Re: Re:

It’s really a question of the cost to operate a news organization versus what the public appears ready to pay.

Since the US has almost no actual news organizations (as in, organizations engage in effective journalism), we don’t really know what it costs to operate one anymore.

It’s telling that what little real journalism there is isn’t coming from the old-school news organizations at all anymore, but from regular people on twitter, blogs, etc. None of which charge anything.

I bemoan the death of journalism in the US, but it’s very hard for me to blame it on people being unwilling to pay or on the internet. Journalism was mostly gone before that, the real downturn being marked by the arrival of for-profit TV news operations of the type pioneered by CNN.

I think people are just unwilling to pay for the press releases and advocacy pieces that are being sold as “journalism”. And rightfully so.

Q?r Tharkasd?ttir (profile) says:

Re: Re: Re:

Funny, down to the very wording it’s the same things as expressed here among the comments, about how worthless the mainstream press and journalism have become of late etc., that I’m finding in a book I’m currently reading: the minutes of the First Pacifist Congress held in Brussels in… 1913 and attended by politicians, lawyers, academics and even the Nobel Peace price recipient for that year (that was way before the Prize became controversial).

Where have we been the past 99 years?

Anonymous Coward says:

Re: Re:

I fear we need another way to get our news reported in future even if the public does a turn-about and happily pays up to get past the many paywalls that are being erected out there.

The public cannot trust any organs of any of the news empires out there, not paper and not on TV/cable. They are all merely a tiny part of a huge entertainment and cable conglomerate. The fact that nobody on TV or in the newspapers is mentioning the whole Megaupload thing, not reporting either side of the story AT ALL, says something, and that’s only the tip of the “One of Six Huge Corporations Owns My News Outlet” problem.

The idea that any of the newspapers or news channels is remotely “Liberal” is hilarious to me–they are all mouthpieces for huge and, by their very nature, Conservative corporations (sorry, Rachel Maddow, even your show carefully selects what it reports on and avoids certain topics like the plague in order to stay on the air.) Anyone who can buy a very expensive ad can control what gets into the paper or on the news show.

I watched a couple of pretty-little-news-ladies “debate” credit card companies’ rights to charge any fees they wanted to wherein the two agreed with one another vehemently for a good five minutes, both on the side of the credit card companies, then a very humanistic, soft-focus ad for Bank of America popped up about 10 minutes later on the same news program. This, on MSNBC, supposedly the most progressive of our news channels. This is how it works in newspapers as well.

We need a whole new other way to get the news, a version of The Fourth Estate that is beholden to nobody in power: the internet is our best hope of that. It will be interesting to see what happens next, for good or for ill. We do live in interesting times.

Anonymous Coward says:

Never understood why ads in digital versions of newspapers are pushed off to the side and generally ignored. When if you pick up a print version ads can easily take up half a page. I’m surprised that newspapers aren’t making more of an effort to give advertising more real estate in the digital format. I don’t see much innovation on this front and that could be part of the problem.

Q?r Tharkasd?ttir (profile) says:

If I may suggest another way of looking at it… An increasing number of common people all over the world, thanks to how samesaid world has been managed for the past decade or so, are becoming imbued with a spirit of independence (let’s call it the Occupy spirit in Anglo-Saxon countries). That spirit extends to how they react, or rather don’t react to ads and advertising in general???regardless of the fact that in the times we’re living in, there’s other stuff on their minds as well as little content in their wallets.

Let’s put it this way: a good number of people are getting smarter.

So as a result there’s maybe one reality that’s finally dawning on the companies advertising for their products (as it did on me when ages ago I cancelled my small company’s ads in the Yellow Pages and went all-out on the net): advertising profits primarily the agencies and other intermediaries, not the producer or the seller. Accordingly, if they have any economic sense at all, they’d be pulling the plug.

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