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A newspaper milestone: more bucks from readers than advertisers

With some ad sales gone away forever, it’s significant that the New York Times group now gets more dough from circulation than advertisers. How far is the Strib from that milestone?
By David Brauer

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.

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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.