The New York Times Company, the publisher of the New York Times, released its results for the second quarter of 2011 yesterday. It announced overall operating losses of $114.1 million in the quarter, compared with operating profit of $60.8 in the same period of 2010. The company blamed "deprecation, amortization, severance" and other special items without which it would have posted an operating profit of $82.9 million.
As the Times launched its digital subscriptions in March, the announcement's details relating to the newspaper's paywall were particularly interesting. The Times ended the second quarter with 281,000 digital subscribers. Of those, 224,000 were subscribers to the newspaper's digital subscription packages, the remaining 57,000 being paid digital subscribers to e-readers and replica editions.
Overall, the company's revenues went down 2.2 percent. Advertising revenues declined 4.0 percent, but digital advertising revenues actually rose 2.6 percent, partially offsetting a 6.4 percent decrease in print advertising.
Interestingly, there was no change in the company's circulation revenues. Exact numbers weren't revealed, but the company said that although there was a decline in sold print copies, revenue from digital subscriptions made up for the gap. The New York Times noted that at The New York Times Media Group, circulation revenues were in fact up 1.6 percent. Earlier it was argued that the Times's digital subscription fees actually give a boost to its print edition. Also TechCrunch noted that presumably many online readers opt for a print subscription that also includes online access.
As Forbes pointed out, the NYT is at the vanguard of paid digital content strategies, which means that there aren't obvious benchmarks to measure the success of its paywall. However, Forbes pointed out that as the number of visits at NYTimes.com didn't substantially change after the introduction of the paywall, the newspaper seems to have succeeded in creating a new revenue source without driving away its web audience.
Several commentators saw the figures as suggesting that the Times's effort to monetise its online content could work in the long run. Newsonomics was one of them, and it also analysed the implications for the newspaper industry in general. But whether the current model will prove to be a sustainable one remains to be seen: "The digital subscription model is a long-term effort, and its full impact on revenues will be more evident over the course of the year as we progress past the early stages of the plan. Our ability to further monetize our digital content will provide us with a significant new revenue stream in the second half of this year," Janet L. Robinson, president and CEO of the company, said in the announcement.
It is too early to say whether the NYT has cracked the code of paid online content, but the latest numbers give reason for some optimism. It should be noted, however, that the NYT is a special case among newspapers - not many publications can boast similar clout and expect similar loyalty from their readers. Even though the NYT may be on the right track, it is doubtful that its model as such could serve as a standard for newspapers in general.