A year ago, I wrote about how the New York Times — despite the success of its metered subscription plan — was stuck running “the Red Queen’s race” from Alice in Wonderland, the one where you have to run at top speed just to stay in the same place. The newspaper’s latest financial results show that this is still the case: although the Times has seen further growth in subscriptions, its overall revenue barely budged, and much of that lack of movement was due to continued declines in the paper’s advertising revenue — both in the print version and online.
In a piece at the Columbia Journalism Review, writer Ryan Chittum gushed about how the Times‘ digital subscription revenue “soared past its digital ad revenue” in the third quarter — but it did so in part because digital ad revenue plummeted another 3.4 percent during the same period, compared to the year before. And that’s actually a larger drop than the Times saw in the third quarter of 2012, which means the problem is getting worse instead of better.
Bloomberg took a look at the advertising problem the Times is facing in a recent piece, noting that the paper’s third-quarter revenue for both print and digital was likely about $140 million, or the lowest it has been since 1998. The drop in the latest quarter marks the 12th straight consecutive decline in ad revenue for the paper — and the Times blamed the decline on “an increasingly complex and fragmented digital advertising marketplace,” which is exactly the same thing it blamed its poor digital ad results on last year.
Ad revenue falling, paywall growth slowing
Print advertising revenue, meanwhile, fell by a somewhat smaller amount in the third quarter — just 1.6 percent. But if you look at the nine months (PDF link) since the beginning of 2013, print ad revenues fell by over 7 percent, part of an ongoing story at newspapers that has seen billions wiped off the balance sheet over the past few years: to take just one example, the Times said that automotive advertising sales at the paper fell by almost 60 percent in the latest quarter.
In a nutshell, digital subscriptions are climbing, but — as Chittum notes, and as industry analyst Ken Doctor also points out — the rate at which they are increasing has slowed dramatically. Right now, the Times is making almost exactly the same amount from digital advertising as it is from digital subscriptions: about $110 million in the first nine months of 2013. But that first number continues to drop, as does the amount coming from print advertising.
At the moment, the paper is more or less holding steady: revenue climbed a minuscule half of one percent in the first nine months of this year. Doctor is right when he says that this is better than a drop in revenue, but it isn’t exactly robust growth, and if print and digital ad revenue continue their rate of decline — and the rate of growth in subscription revenues continues to flatten — the Times could find itself going in reverse before too long.
Post and thumbnails courtesy of Shutterstock / Everett Collection and Rani Molla of Gigaom