Hard Times

The New York Times launches a redesigned issue on Monday, merging several sections of its metropolitan edition into a newspaper that will resemble the national version. The move is the latest in a series of cost-cuts by the newspaper, which aims to save 230 million dollars next year and has already shed 100 journalists from its 1,300-strong newsroom.

The Times is one of a host of newspapers dealing from one short-term problem (the credit crisis) and one long-term (the movement of readers to the internet).  Even before the dramatic events of September, advertising revenues had fallen -- by 16% in the second quarter, with classified advertising in particular is shrinking under pressure from online listing sites. The Gannett group of newspapers saw a 17% year-on-year decline in advertising revenues in September. Funding problems spelled the end of the Times’ centre-right rival, the New York Sun, which folded on September 30 after six years of existence.

Meanwhile, studies of long-term print newspaper readership show a relentless downward trend, as readers migrate to the internet. Studies find that many readers ‘blend’ online and print sources, and total audiences are in fact growing -- it is just that they are unwilling to spend money, avoiding paid content on the web, and cutting back their print purchases to just the weekend editions while skimming the same paper online during the week.

So, while the New York Times enjoys strong audience figures for its website (its site is the most popular for a newspaper on the World Wide Web, serving as a source and jumping-off point for the blogosphere) and its parent company has profited from its acquisition of About.com, overall revenues for the group have fallen. Unusually for a US newspaper, print subscriptions are a profit centre for the firm, making losses of readers even harder to bear. The company has not helped its financial position in recent years, with a number of questionable business decisions– commissioning a new building from prominent architect Renzo Piano (after missing out on hundreds of millions of dollars through the hasty sale of its old building); overpaying for the Boston Globe, and buying back New York TImes stock just as the market peaked. These have led to board challenges against proprietor Arthur Sulzberger Jr, who has fended them off but now has to contend with activist hedge fund representatives on the company board, and the presence of Mexican tycoon Carlos Slim as a minority owner.

A challenge is now emerging from a rival paper whose controlling family was toppled. The Wall Street Journal, newly owned by the cash-rich News International media group, is entering into more explicit competition with the Times to be the national newspaper of record. Its business coverage has been cut in favour of more international, sports and lifestyle coverage, and its prize-winning, sometimes rambling investigative coverage is giving way to shorter stories.  Proprietor Rupert Murdoch has worldwide ambitions for the acquisition, noting that global print readership is still growing, with strong demand for business news in Asia. But as the tone of a personal letter he is reported to have sent Sulzberger (sample quote: ‘bring it on’) makes clear, the main target of his expansion is another newspaper in the Big Apple. The fight is on, then, for a slice of a shrinking pie.