'Times' C.E.O. Mark Thompson promises a 'new strategy,' details in April
Perhaps the highlight of The New York Times Company's quarterly earnings call this morning was the moment when Wall Street analysts and reporters got an earful of a refined British accent, adding a bit of panache to what is usually a painfully robotic affair.
It was Mark Thompson, the former B.B.C. boss who has already weathered an international media scandal and a closely-watched round of newsroom downsizing since becoming the Times Company's new chief executive in November.
"I took this job not just because I've been a devoted user of The New York Times for many years, but because I believe it's one of a handful of global news brands that can not just survive, but thrive in this digital era," he said in the first public comments about his new gig.
But if Times watchers were expecting any big newsmaking revelations about the future of the company and its venerable flagship, they probably hung up the phone feeling a bit disappointed.
Thompson, who in his role as successor to Janet Robinson will be expected to steer the Times' ongoing digital expansion in the face of sinking print revenues, said he's already at work on a "new strategy for the company."
The specifics however are scarce. He mentioned building up the Times' portfolio of paid digital products and developing its nascent conference business, as well as ramping up mobile and video efforts while growing internationally. (Nothing we haven't already heard.) But that's about it.
"I'll have much more to say to you ... on our next earnings call in April," he said.
In the meantime, we can assume Thompson is staying the course that chairman Arthur Sulzberger Jr., in his temporary role as interim C.E.O., spent most of 2012 laying out for him: A consolidation of resources around the Times' core editorial brand as the mothership becomes smaller and more focused.
Financially, the Times Company is already beginning to taste the fruits of those efforts. It reported improved fourth-quarter results today, with net income up 200 percent to $176.9 million from the same period a year earlier. Executives attributed the improvement largely to the sale of About.com, the online resource unloaded by the Times Company in September. Previously, the company had sold off its group of more than a dozen regional newspapers. (It still owns The Boston Globe and The International Herald Tribune.)
But there was another bit of sunshine in today's earnings report: 640,000 paid digital subscribers to the Times and the IHT, an increase of 13 percent since the end of the previous quarter.
"It's an absolute key focus," said Thompson of the digital strategy, which is so far seen as a thriving experiment in getting readers to pay for content that used to be free.
In 2012, money derived from circulation surpassed that of advertising for the first time thanks to the addition of those paying to read the Times and its affiliated publications on web browsers and mobile devices like smart-phones and tablets. Fourth-quarter circulation revenues were up 16.1 percent.
Asked on the call whether the Times might start charging more for digital subcriptions, Denise Warren, general manager of nytimes.com, said the company was "evaluating the price structure ... but we've made no decisions at this time." She also said they're exploring both a premium digital product and an entry-level one. (Perhaps the college-friendly "NYT Junior" that Nat Ives of Ad Age caught wind of?)
If successful, such initatives will help mitigate the reality that print advertising revenues, long the key to a newspaper's balance sheet, are declining at a steady clip—5.6 percent year-over-year in the case of the Times' fourth quarter. The Times fiscal year for 2012, though, had 53 weeks compared to 2011, and that extra week fell in the fourth quarter.
"Excluding the additional week," according to the earnings release, "estimated print and digital advertising revenues decreased 10.2 percent and 1.7 percent, respectively, largely due to the uneven economic environment, ongoing secular trends and an increasingly complex and fragmented digital advertising marketplace."
Analysts don't expect print fortunes to improve this year as buyers, particularly the types of tony national brands that contribute the lion's share of Times advertising dollars, continue moving to other platforms.
"The big picture for me is how well they can be a national and a global ad player," said Ken Doctor, a media analyst with Outsell, in an interview with Capital earlier this week. "That's the question for Mark Thompson."
On the bright side, even as the Times trims its newroom and other areas in an effort to save money (it recently negotiated more than 20 buyouts and a handful of layoffs), it has a long way to go before its journalistic muscles atrophy to the extent of papers like The Los Angeles Times and The Baltimore Sun.
"In short, their newsroom is still the gold standard," said Doctor. "They still have more than 900 people. Even at 700, not that we want to think of them losing a couple hundred more people, they would still be far and away a major news source."
(Doctor's reaction to today's results, by the way: "Unsteady as she goes. ... The Times, at the beginning of 2013, isn’t being pushed backward; it’s just not making much forward progress.")
Ed Atorino, an analyst with Benchmark, thinks there's still more fat to trim.
"They have no choice," he told Capital. "I understand they have a wonderful staff and Arthur Sulzberger Jr. is trying to ease the pain, but sooner or later they're gonna have to fess up."
Atorino's advice for Thompson: "He's gotta get tough and cut costs."
Thompson, for his part, seems open to that.
"We believe some cost-cutting is inevitable and necessary," he said in his prepared remarks, adding a caveat that may lend some comfort to the reporters and editors at 620 Eighth Avenue: "We will work hard to maintain a sizeable and robust newsgathering operation."
Disclosure: I've written a few freelance pieces for The New York Times.