In its recent Q2 report, The New York Times company announced a second quarter loss of $88.1 million driven by a further decline in print and online ad revenue of 6.6% to $220 million. How could there be any good news in that? Well, they were also able to announce circulation revenue went up 8.3% to $233 million. What that means is for the first time, in an industry that has relied on advertising to drive revenues, circulation now brings in more money for the Times than ads do.
Will these trends continue in the future? Well a blog post from Parsely, a company that provides content insight to web publishers (including many news organizations) analyzed the upward trend of circulation revenue and the downward trend of advertising revenue to conclude there is hope for the Times.
In explaining reasons for declining ad revenues, they mention the uncertainty of digital advertising and low reader tolerance for display ads, but finish on a positive note saying eventually advertising revenue will recover since it is in the best interest of both advertisers and publishers to figure this out. On the other hand, they believe circulation revenue growth isn't sustainable indefinitely. At some point the total available audience is limited. Though this is an important point, I think with the right mix of content, pricing, and strategy, the Times could balance growth in subscribers with increases in prices into a sustained increase in circulation revenue.
Will these trends continue in the future? Well a blog post from Parsely, a company that provides content insight to web publishers (including many news organizations) analyzed the upward trend of circulation revenue and the downward trend of advertising revenue to conclude there is hope for the Times.
In explaining reasons for declining ad revenues, they mention the uncertainty of digital advertising and low reader tolerance for display ads, but finish on a positive note saying eventually advertising revenue will recover since it is in the best interest of both advertisers and publishers to figure this out. On the other hand, they believe circulation revenue growth isn't sustainable indefinitely. At some point the total available audience is limited. Though this is an important point, I think with the right mix of content, pricing, and strategy, the Times could balance growth in subscribers with increases in prices into a sustained increase in circulation revenue.
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