Good News for The New York Times (But It's Still Mostly Doomed)

Last Updated Jul 23, 2010 2:08 PM EDT

The New York Times (NYT) finally managed to grow its revenues in Q2 2010, mostly on the back of a strong upturn in online advertising, and this was hailed as good news in the business press. The problem is that if you dig around in the individual line-items on the Times' income statements, it becomes obvious that a huge chunk of the paper remains doomed.

I previously suggested that to survive, the NYT would eventually need to cut hundreds of jobs from its 1,250-person newsroom. Now that we have some numbers showing what NYT looks like in a growing ad market, I still can't see how it's possible that the paper will remain the size that it is in the long run. Slowly, push is coming to shove at the Times.

Here's the topline picture:
  • Revenues: Advertising: $314,880; -0.2% Circulation: $234,808; 3.2% Other: $39,899; 0.6% Total: $589,58 7; 1.2%
The revenue increase isn't coming from advertising, which is the dominant revenue stream at the Times group. Circulation revenues grew, but it turns out this came from price increases. The actual number of people buying a subscription to one of the Times' papers declined, the company said.

That's horrible news for the Times. You can extract gains from price increases in the short term, but in the long term advertisers won't pay more to reach fewer people. That's why ad revenue continues to fall.

The major revenue gains came from NYT's various digital and online efforts, which increased 20.5 percent to $94.3 million. Internet revenues at the News Media Group (dominated by The Times newspaper itself) increased 19.8 percent to $50.4 million.

This is the good news, but is it good enough? If you look at NYT's ad revenues by category, you can see that although the news media group eked out gains over all, some categories are in freefall. Retail went down 10.6 percent. Real estate collapsed 15.3 percent.

It's impossible to imagine all that money returning to ads in the newspaper itself. Does anyone still hunt for a house in a newspaper when you can see photos of houses, inside and out, on the local multiple listing service site, and mark them on Google Maps?

In order for the Times to survive as a giant news operation with more than 1,000 editors and reporters, its digital operations may have to double their revenues faster than the secular move from paper to web halves those revenues.

As a Times subscriber, I'd like to see them do it. But I wouldn't put money on it.

Related: Image by Flickr user jphilipg, CC.

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