The New York Times' latest cutbacks

The Grey Lady is shedding more newsroom employees -- the latest evidence that the paper is still struggling to find its feet in the digital era.

By TheWeek.com Dec 4, 2012 9:49AM

Janis Christie Getty ImagesThe New York Times on Monday announced that it would offer buyout packages to 30 newsroom employees, and that layoffs would ensue if the 30 spots were not voluntarily filled. Citing a difficult "economic environment" that has led in recent years to a 60% staff reduction on the paper's business side, Executive Editor Jill Abramson said, "There is no getting around the hard news that the size of the newsroom staff must be reduced."

 

While the loss of 30 jobs pales in comparison to the ousting of roughly 100 newsroom staffers in 2008, it is the latest evidence that the Times continues to struggle despite putting up a subscriber paywall, which was intended to extract more revenue directly from online readers.


The New York Times Co (NYT) added an impressive 83,000 digital subscribers in the third quarter, and is on track to have more digital subscribers than print subscribers in the next year or two. But print and digital revenues in the third quarter dropped by 10.9% and 2.2%, respectively. The problem is that "digital simply generates much less revenue than the print business," says Henry Blodget at Business Insider. "So, as the print business continues to shrink, the newsroom has to shrink."

 

Would the Times make more money from digital if it dropped its subscriber paywall? This is the question that was batted around endlessly before the Times decided to erect the paywall, and many argue that the Times made the right choice. Competitors that continue to offer their content for free -- like The Washington Post and Britain's The Guardian -- are on "a glide path to a desiccated newsroom," says Dean Starkman at the Columbia Journalism Review:

 

"Print ads have been falling at a double-digit rate for six years (with a 6% decline in 2010 the exception), which is the industry norm. While much hope was invested -- back in what seems like a different era -- in the idea that digital ad growth would eventually make up the slack, the reality-based community has now moved on. Digital ad growth has tapered off at disappointingly low levels."

 

There is so much competition for digital ads that advertisers can pay newspapers tiny rates that are only getting smaller. That means the Times is stuck between a rock and a hard place: Digital subscription growth is not enough to make up for losses from the print business, and neither is digital ad revenue.

 

What can the Times do? It could accept its fate as a smaller newspaper. It could bank wishfully on an explosion of digital subscriber growth. It could even sell itself to a profitable news business like Bloomberg. Or it could join Facebook and nearly every other online company in trying to come up with more creative ways to sell advertising to users. To that end, the New York Times should start getting "to know their readers better," says Matthew Ingram at GigaOm, and use that targeted information to charge higher rates.

 

More from The Week

1Comment
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

129
129 rated 1
281
281 rated 2
444
444 rated 3
732
732 rated 4
629
629 rated 5
623
623 rated 6
610
610 rated 7
440
440 rated 8
303
303 rated 9
126
126 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
BBBYBED BATH & BEYOND INC10
TWXTIME WARNER Inc10
COPCONOCOPHILLIPS9
HDHOME DEPOT Inc9
VZVERIZON COMMUNICATIONS9
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.