A newspaper milestone: more bucks from readers than advertisers

From the top of the newspaper food chain, where the New York Times Company just reported third-quarter results:

The largest segment of the company reached a watershed moment, collecting more from readers than from advertisers, in an industry where advertising traditionally outweighed circulation in revenue by at least three to one. At the company’s New York Times Media Group, which includes The Times and The International Herald Tribune, circulation revenue reached $175.2 million in the third quarter, while ad revenue dropped to $164.5 million.

For those of you wondering, between March and September, the Strib reported $79.7 million in ad sales and $27.6 million in circ revenue — the 3:1 ratio noted in the Times piece, not the 1:1 ratio now produced by the Times itself.

Everyone knows user revenue will have to replace ad spending that has been permanently obliterated. So papers like the Strib have miles to go to buttress themselves from this realignment.

Of course, the Times’ “good” ratio developed in part because ad sales fell 30 percent for the third quarter. Circulation revenue was up 6.7 percent.

Though that meant company revenues fell less than competitors, net result is painful: The Times just announced plans to whack 100 of its 1,250-person newsroom. Another reason for that: while Times readers are willing to pay for a higher-quality product, the company’s debt situation is almost certainly worse than the reorganized Strib’s.

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Comments (1)

  1. Submitted by Annalise Cudahy on 10/22/2009 - 04:25 pm.

    This is fascinating because just the other day I was watching the delivery person come through the ‘hood at 4AM. He stopped at one house, got out and flipped the paper, drove closer to another and chucked it out the open window, and generally creaked and burbled his way haphazardly down the street.

    A thought came to me: If the money is in advertising, why not simply deliver the paper to every single house in Saint Paul and claim an amazing circulation? After all, it works for the Highland Villager – so why not do it on a bigger scale?

    You’re telling me here that advertising is dead and subscriptions might be the way of the future. Is it possible that some of the ideas I get at 4AM aren’t fabulous?

    Wait … hold on … I got stuff to do … well, sort un-do.

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