Times Co.'s Mark Thompson unveils new strategic plan amid declining income
With just a few days left in April, The New York Times Company's new president and C.E.O. Mark Thompson is making good today on his promise to announce a series of strategic initiatives for the company this month.
A press release issued this morning in advance of an earnings call later today laid out in broad terms what he's planning; another announcement disclosed a significant but not unexpected drop in income for the company. And they together are a sign of the times.
Once upon a time these large strategic initiatives would hint at campaigns for acquiring name-brand companies and technologies to broaden the business; but in the 2013 media environment, the Times is sticking to its knitting.
First, the grim part:
- Net income last quarter was $3.1 million, down from $42.1 million in the same period last year
- Income from continuing operations is down to $3.1 million from $8.7 million a year earlier
- Total revenue declined 2 percent to $465.9 million
- Ad revenue declined 11.2 percent to $191.2 million from $215.5 million
- Print advertising at the Times, Boston Globe and International Herald Tribune declined 13.3 percent Digital advertising revenue declined 4 percent
But this is really just the chickens coming home to roost from the same dire predictions that put the company on a cost-cutting and asset-sales program over the last six months, including a significant and very public buyout program in the newsroom.
Also expected were most of the new strategic initiatives announced this morning, which also have a strange ring of austerity to them. (In other words: Don't expect to hear any stories about the Times buying internet properties anytime soon.)
First of all, the Times' existing subscription program will grow both up and down: Lower-cost subscriptions will give price-sensitive consumers a way of accessing New York Times journalism on important news and breaking stories, and will cater to people with an interest in just part of the media company's offerings like technology or politics or food.
On the upside, the company plans to bundle enhanced packages for uber-subscribers willing to pay more for preferred access to Times events, to give subscriptions as gifts or to subscribe a whole family to the full digital media offerings of the company.
The rest of the program is less specific, but hews to what we've already heard about the Times Company's "Invest in the Times" initiative, a four-pronged approach that included subscriptions, international expansion, video and e-commerce.
Here is the full press release from the Times Company; stay tuned for Thompson's remarks about the new strategies later today.
NEW YORK--(BUSINESS WIRE)--Apr. 25, 2013-- The New York Times today announced a series of strategic initiatives, which aim to grow the company’s revenues by leveraging its brand and the power and popularity of its award-winning journalism. Among the planned initiatives are the next phase in The Times’s digital subscription/paid products strategy; an international expansion under the new unified brand; and a renewed emphasis on both video production and brand extensions. These initiatives will begin to roll out in the fourth quarter of 2013 into 2014.
Mark Thompson, the president and chief executive officer of The New York Times Company, said, “We mean to grow our business by launching new products and services based on the unique strengths of Times journalism and by investing in the rapid expansion of existing operations – video and live events are examples – where we’re already seeing strong growth. We want to deepen our relationship with our existing loyal customers, but we also want to use a wider family of New York Times products to reach new customers both here and around the world.”
New products under development as part of the strategy include:
- A lower-priced paid product designed to allow access to The Times’s most important and interesting stories in a convenient, media-rich package for consumers looking for an efficient way to stay informed. Consumer research has suggested very strong demand for such a product.
- Other new products, also at lower price points, that would offer deep access and additional content and other new features in specific content areas such as politics, technology, opinion, the arts and food.
- An enhanced tier that would offer extras at a higher price point to “all digital access” and print subscribers. Subscribers will likely be offered access to Times events and the ability to gift subscriptions and provide full family access, among other incentives.
Growing international subscribers is another key component of the company’s strategy. As announced earlier this year, The Times will rebrand the International Herald Tribune as the International New York Times in the fourth quarter of 2013.
By the sheer quality and breadth of its journalism, The New York Times has become one of the best-known news organizations in the world. The company believes that under a unified brand, there is a real opportunity to drive new international revenues, particularly through the acquisition of new digital subscribers. The Times will invest in international marketing and in pricing and payment methods to localize the purchase process, which will make it easier for international readers to become subscribers.
The development of a more robust and comprehensive video presence is another strategic initiative, which is still in the early stages of development. The company recently appointed a new general manager of video production to lead the effort to scale The Times’s video business to satisfy the demands of both users and advertisers.
The fourth component of the plan for growth is through brand extensions. The company believes that The Times can leverage its key assets of brand strength, marketing prowess and audience quality to generate incremental revenues by selling goods and services that match current reader and customer needs. The planned areas of focus are games and e-commerce. An expansion of the company’s conference business is also planned.
“The initiatives we are announcing today should be seen as a significant first step in our effort to put The New York Times Company on a path to sustainable growth,” said Mr. Thompson. “Last month, we announced a new organizational structure to help The Times concentrate on innovation and new product development as well as on the management of our existing businesses. Today’s announcement should be seen alongside that reorganization – and our plans to sell the New England Media Groupand rebrand the International Herald Tribune – as evidence of our determination to focus all of our energy and creativity on the future of The New York Times itself and to establish it as the most innovative as well as authoritative print and digital news provider in the world.”