Why The New York Times Co. Will Still Never Be Great Again

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The New York Times
New York Times (NYT) finally has its new CEO, but this doesn't mean its problems are going away.

The newspaper giant's announcement -- revealing that BBC Director General Mark Thompson will step up as the company's next president and CEO come November -- may answer one lingering question, but it doesn't address the litany of lingering doubts when it comes to print journalism in general and New York Times in particular.
  • Its former CEO left at the end of last year with a golden parachute of severance, consulting fees, and pension benefits topping $15 million to break her fall. Investors weren't impressed. Is Thompson going to get a similar deal that rewards disappointment?
  • Revenue has been falling every year since 2006, and analysts see the company's top line heading lower again in both 2012 and 2013. What will it take to reverse that bleak trend?
  • A price hike in January may help in the near term, helping to boost circulation rates for a change, but advertising revenue -- even digital advertising revenue -- declined in New York Times' latest quarter. How long will it take before print subscribers revolt over the increase?
Oh, and it took New York Times eight months to find a new leader for its newspaper company, and it wound up with a British television executive?

Really?

All the News That Fits

New York Times has been on a crash diet. It sold off 16 of its smaller regional newspapers several months ago. It wrote down the goodwill value of About.com in its latest quarter, confirming last week that it's in the process of scaring up a buyer for the website.

Layoffs and asset sales aren't fun, but there's nothing wrong with streamlining operations and focusing on what works. It's something that the company has gotten right.

The company may have seemed more glamorous when it shelled out quarterly dividends or when it had multimedia assets and entertainment properties, but there's something to be said for rallying around its three core publications -- The New York Times, the International Herald Tribune, and The Boston Globe -- and their related online hubs.



The Digital Divide

There's no arguing that the company owns the class of print and investigative journalism, but we live in a simpleton new media era when hobbyist bloggers, WikiLeaks, and Twitter celebrities break news. Sometimes -- sadly -- a 140-character tweet or a grammar-massacred blog post is good enough for most consumers.

Do you have a premium New York Times subscription?
No, but I may like to.23 (11.7%)
Yes18 (9.1%)
No. I would not consider paying.156 (79.2%)
So New York Times began an experiment in March of last year by installing tollbooths in cyberspace. It began by limiting readers to 20 free stories at NYTimes.com a month. Encouraged by its ability to drum up premium subscriptions, the company lowered the ceiling to 10 freebie stories a month. Anyone who wants to read more will have to pay up -- or access the site from a different connection.

Bulls will argue that the company is winning the war. By the end of June, the service had 532,000 paying digital subscribers. That's nothing to scoff at for a pay wall that was only put up 16 months earlier, but is it enough to offset the inevitable print decimation at a company with a cool enterprise value of $1.6 billion?

Fans of the paper's award-wining journalists may seem to be showing unwavering support, but the failure of About.com says it all. The dot-com pioneer set itself apart as an information hub with topic gurus who helped shape online conversations. These days, an eye-catching YouTube thumbnail or trendy hashtag will do the trick when it comes to attraction.

We can lament the declining quality of the tastemakers, but it's amazing what consumers will settle for when something is available for free.

Thompson will have his hands full later this year -- if he's lucky.

NYT Paywall Paying Off

Longtime Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article.


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scot168

When my parrot died I cancelled my subscription.

August 17 2012 at 4:02 PM Report abuse rate up rate down Reply
hgeorgech

Once .. just once ... have AOL publish why it - AOL - will never be great again ... THAT we'll read with interest !!

August 17 2012 at 3:55 PM Report abuse rate up rate down Reply
Anne

Having read the comments below, it appears that the author of the above item has provided it own remarks.

August 17 2012 at 3:43 PM Report abuse rate up rate down Reply
Anne

The New York Times has always been and will continue to be one of the finest newpapers in the world. As one who has travel most of the world via public affairs, I can attest that I have seen the New York Times on the desks of Heads of State, Prime Ministers and cabinet members. Their journalists are creditable and hard working. Their editoral board is second to none, and their finacia, culrural and sports pages are masterpieces. What else does one want in a newspaper? Ride on New York Times.

August 17 2012 at 3:40 PM Report abuse +1 rate up rate down Reply
garryangel

My sister keeps asking if i'd like a subscription to the NYT. I tell her I don't own a dog so i don't need it !!!

August 17 2012 at 3:25 PM Report abuse rate up rate down Reply
Burton Simpson

The New York Times will never be great again because, like most media, it is dominated by far left liberals. There was no need to ask the question. The answer is a no brainer.

August 17 2012 at 3:10 PM Report abuse rate up rate down Reply
Bill

All the news that fits it's liberal idealogy is why the NYT is dying.

August 17 2012 at 3:08 PM Report abuse rate up rate down Reply
arjohny

i think you have to concede the times readers have gradually lost pieces of their brain cells over the years by reading that paper . . . unfortunately those cells are from the common sense side of the brain.

August 17 2012 at 2:58 PM Report abuse +1 rate up rate down Reply
richg777

The NYT Liberal Bias has become worse and worse over the years; as a result, their circulation has spiraled down for years. It is bad enough the Liberal spinthey seem to place on everything but also what they do not report. So obvious! They won't be missed!!

August 17 2012 at 2:19 PM Report abuse +2 rate up rate down Reply
tgemign

The NY Times is undoubtedly one of the finest newspapers in the United States. Well written and informative, it's journalistic longevity and integrity is virtually unmatched. The bias towards the paper and it's "left" leaning editorials is not enough to discredit it's obvious merits as it strives to serve the public's need for credible information.

August 17 2012 at 1:39 PM Report abuse -1 rate up rate down Reply
2 replies to tgemign's comment
richg777

Huuuu? Please re-read what you wrote. News should be fair and balanced....NOT Biased!

August 17 2012 at 2:20 PM Report abuse +1 rate up rate down Reply
Burton Simpson

If the New York Times is such a great newspaper why is it going down the toilet? Why, because you just cited the reasnon. It is a left wing rag and a Obama administration propaganda rag at that!

August 17 2012 at 3:13 PM Report abuse rate up rate down Reply