Wednesday, 27 August 2008

Crisis of confidence in the New York Times and Newspapers

It's not just that results are bad for the New York Times, but also that what is claimed by many (wrongly in my view) to be the silver bullet solution to their problems has also completely stalled: online growth.

But what is really bad is how the media industry and the trade media write and speak about the NYT (and by extension the IHT).

Purely online trade media (let's take Media Bistro as an example) relish in seeing the NYT in trouble.

But it's worse than that.

Print media like Advertising Age also relentlessly spot trouble and see clouds of doom and gloom in anything NYT related.

Two problems are at play here.

Firstly, the NYT corporate communications operation (which is not run on a shoe string) is losing the battle for hearts and minds, if it hasn't already done so.

The second problem is that the hearts and minds - in this case advertisers - are under a non-stop tap of 'NYT in trouble stories', and that simply doesn't help the foot-soldiers sell ads.

Let's take as an example this article from Advertising Age, which was headlined (probably accurately, but that's not the point here):

New York Times Shocker: Online Ad Growth Stalls

Now if Advertising Age are headlining NYTs stories as 'shockers' then the NYT has real problems, both with how it is perceived and the reality behind that perception.

Here's what they had to say:

New York Times Shocker: Online Ad Growth Stalls
July Results Show Drastic Drop to Just 1%
By Nat Ives Published: August 26, 2008 NEW YORK ( -- When The New York Times Company released its July results today, one could be forgiven for shrugging when spotting the 17.9% decline in ad revenue at its news media group. It's been that kind of cycle -- on top of a general rise in challenges to print newspapers.
But the media group's internet ad revenue turns out to be a real shock: It grew less than 1% as, in the words of the company, "more moderate growth in display advertising was partially offset by continued weakness in online recruitment advertising."

Growth had been stellar

That's the big bad economy coming to undermine traditional media's best hope for the future. Compare that 0.9% increase in July with a bumper 21.5% increase in internet ad revenue for June and jumps of 14.2% in May, 25.6% in April, 14.8% in March, 14.4% in February and 8.6% in January. With its anemic digital showing for July, The Times Co. suddenly looks at risk to join some other major newspaper players in wondering where the golden goose has gone. As Ad Age reported earlier this month, Tribune Co., Lee Enterprises and E.W. Scripps all reported declines in web advertising during the most recent quarter. "The decline in print has been so pervasive that it's taking the online stuff with it," analyst Ed Atorino said at the time. "This is the worst market we've seen." For the Times, July may be just a low mark for now. The company said internet ad sales were looking better in August as demand for display advertising grew. And New York Times Co. Chairman Arthur Sulzberger Jr. has built teams of geeks and gurus to secure the best possible position on whatever business landscapes emerge.
"July's digital results were due to a relative weak month in display advertising, coupled with weaker-than-expected help-wanted advertising across the News Media Group," a Times spokeswoman said. "We are expecting better performance in display advertising at in August. To date in August, online advertising for the News Media Group is trending up in the low double digits."

A believer in print

It's unlikely that Mr. Sulzberger is sweating July's slower ad growth online too much. He believes that print still anchors everything, including the move into digital formats. And the number of people who have subscribed at home for two years or more, a group that tends to keep subscribing, has risen to 820,000 from 550,000 three years ago, Mr. Sulzberger told us last month.
"Think about that as a solid print base to lever yourself into your digital future," he said.

Geeks and gurus? Who are they and have they got a real strategy beyond faith and platform/base/leverage?

I'll come back to that.
International Herald Tribune
New York Times

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