The bad news is that ad revenue is still down across the New York Times Company, dropping 8.9 percent in the third quarter and putting net income down 85 percent from a year prior. Print ads in particular suffered, dipping 10.9 percent, while digital had its own decline of 2.2 percent. But there is a silver lining, although the hue might be more accurately described as grayish for the moment: People are paying for the product.
For the third straight quarter, circulation revenue is up and exceeds advertising dollars, growing 7.4 percent to $234.9 million of $449 million in total revenue. Digital subscriptions in particular continue to grow, reaching about 566,000, an 11 percent increase from last quarter. In print, sales are down, but prices are up and people are still paying.
The poor ad numbers, the company said, are based on "the challenging economic environment, ongoing secular trends and an increasingly complex and fragmented digital advertising marketplace," but the continuing rise in circulation dollars represents an intriguing shift in a business long dependent on ad revenue.
"We have the pieces of an emerging business, we just have to see how far how far we can go," media analyst Ken Doctor told Daily Intel when this pattern first emerged. "The future looks like it's going to be a majority reader revenue. What we don't know is at what level."
Update: Even if this earnings breakdown is starting to look familiar, that doesn't make the "very disappointing" advertising numbers any less troubling. The company's stock fell nearly 22 percent on the day for its biggest losses since 1980.