New York Times aims for global growth
Rebranded International Herald Tribune to launch tomorrow
The International Herald Tribune will re-launch as the International New York Times from tomorrow as part of the company’s global growth strategy. Photograph: Bloomberg
While some newspaper companies have spent recent years shifting their emphasis to other types of investments like television, The New York Times has taken a different path. It has been selling off its peripheral assets and concentrating on its flagship newspaper and website. Regional newspapers: gone. Its stakes in the Boston Red Sox and the New England Sports Network: gone. About. com: history. The Boston Globe: sold at a steep loss.
When the sale of The Globe closes this month, the company will have shed its last major outside holding and essentially stripped down to its central product - New York Times journalism. On Tuesday it will introduce The International New York Times, a central component of a stepped-up global growth strategy. The moves signal a major change for The Times, which has become smaller as it has sold off investments and trimmed staff.
After the sale of the New England Media Group - led by The Globe, Boston.com, The Worcester Telegram & Gazette and Globe Direct, a direct-mail marketing company - it will have about 3,500 employees, fewer than half the number it had two years ago and nearly a quarter of the company’s size in 2002. When the deal closes, the company will be down nearly $400 million in annual revenue from the nearly $2 billion it posted in 2012. The bigger shift for The Times has been from a news organisation that survived primarily on advertising - it generated $900 million in ad revenue last year, compared with $2 billion in 2002 - to one relying on circulation and consumer products. Many of the company’s major initiatives involve shifting from a reliance on the advertising, which for so long was its lifeblood.
The company has announced plans to introduce new subscription products, attract paying international readers and expand into video. “If we can get the combination of the new products that we’re doing and the international strategy to significantly increase consumer revenue, that could be of real significance,” Mark Thompson, The Times Co.’s president and chief executive, said in a recent interview. The plans vary from news-based products, like video, mobile apps and expanded international coverage, to tangential revenue producers like one-day conferences and cruises featuring Times reporters as expert speakers (there is currently one in Western Europe featuring two members of the paper’s Washington bureau). Thompson stressed that many of the initiatives involve and depend on using Times journalists, and building the efforts around them.
“The last thing in the world we want is the business side trying to invent journalistic product,” he said. “The future of journalism needs to be figured out in the newsroom of The New York Times, not in the ad department.” But the financial challenges that have battered the industry remain as daunting as ever, and The Times is making these changes under the impatient watch of Wall Street, which measures success in quarters, not years.
“In 2014, we are going to start looking at whether some of these investments are going to be successful,” said Alexia S. Quadrani, an analyst at JPMorgan Chase. Times executives have been clear that they see trouble spots ahead. The company still relies on its printed edition for the vast majority of its revenue. According to its second-quarter earnings report, print advertising generated about 75 per cent of total ad revenue and digital advertising less than 25 percent. On the circulation side, print subscribers generated 84 per cent of revenue. Craig Huber, an independent research analyst with Huber Research Partners, noted that even as readers migrated to digital products, The Times has reported digital advertising declines for the past six quarters.