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New York Times Hemorrhaging Money

Eyes Digital Products To Stave Off Bad Economy

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[ Business]

The New York Times Company released its earnings for the Q1 2009, and the situation doesn’t look good. If things keep going the way they’ve been going for the nation’s largest print news organizations, the news landscape in 2010 could look much, much different.

There is a glimmer of hope in the NYT’s earnings release, though—the company didn’t blame the Internet for losing over $61 million last quarter. Instead, it was the economy that was responsible for a 27 percent decline in advertising revenue, a trend the company sees continuing into Q2.

The NYT cut costs by 9.5 percent last quarter and expects to save $330 million this year in operating expenses, a move that hopefully will offset advertising losses until the economy recovers. President and CEO Janet L. Robinson expects cost cutting measures combined with new digital initiatives will move the company forward until advertising recovers.

Company Advertising Revenues by Category

“In time, however, we believe that the economy will grow and the advertising market will improve,” said Robinson “While we are looking forward to that day, we are not waiting for it. We have moved aggressively to restructure our cost base in line with our revenues and continue to develop innovative new digital products that enhance our financial performance. When advertising improves, we believe we will be well positioned to meet the needs of the marketplace and to benefit from our restructured cost base.”

Hopefully, that won’t be too little too late. The NYT-owned Boston Globe, which lost $50 million last year and is expected to lose $85 million this year, could shut down if unions don’t agree to cost cuts and layoffs. The Globe itself reports about the paper’s missed opportunity to buy Monster.com on the cheap back in 1995.

Members of the family that had owned the Boston Globe until it sold to NYT Co. in 1993 protested their grandfathers “would roll over in their graves” if the paper bought Monster. This was at the peak of a time when big-city newspapers were pulling in $5 million every Sunday due their monopoly on classified advertising.

The rest, as they say, is history. As papers across the country shut down or go online only, the newspaper industry is going to have to make some bold digital moves or face extinction. The quickest road would be through acquisitions, but financially, it may be too late for that, especially since even large, national companies are having difficulty securing financing.

Don’t fret too much, though. This is their problem more than yours. If the NYT or any number of other papers die, it’s not the end of the news, just the news as we know it. The news will continue, transformed, evolved, reborn, rebooted online.   
 

 

New York Times Hemorrhaging Money
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