Is the New York Times doing as well as it says it is?

A theme that has emerged from this blog has been the decay and inevitable destruction of the mainstream media. However, if one reads only the New York Times, one could be forgiven for thinking that its prospects have never been better:

“Trump is the best thing to happen to the Times’ subscription strategy,” said Dean Baquet, executive editor of the Times on CNN Sunday. “Every time he tweets it drives subscriptions wildly.”

He added, “Our digital subscriptions are through the roof, our print subscriptions are up.”

Trump has long derided the Times for critical coverage of his campaign and administration, deeming it the “failing New York Times” whenever he speaks about the paper publicly.

Indeed, the Times added 276,000 net new subscribers during the fourth quarter of 2016. But is the Times’ financial picture as sound as it’s made out?

In the press release touting the increase in new subscribers, the Times  reported that adjusted operating profit (which reverses a one-time charge) declined from $289 million in 2015 to $240.9 million in 2016. Among the reasons for this decrease is the 9% year-over-year decline in adversting revenue, from $638.7 million in 2015 to $580.7 million in 2016.

Furthermore, one can ask reasonable questions about the quality of the new subscribers. For example, the Times has entered into a marketing arrangement with Spotify, in which not only a new Times subscriber receives a free Spotify Premium account, but can pass along two complimentary subscriptions to his or her friends. Therefore, one can ask what the Times pays in net acquisition cost for, and receives in additional revenue from, each new subscriber.

Beyond that, there is the curious question of where Times’ subscribers actually reside, which is a key metric for advertisers. As ZeroHedge reports:

Ultimately, for the NYT to be viable as a going concern, it will need to stem the plunge in ad revenue which may also be adversely impacted by Trump’s relentless bashing.

And then there is the question of overall traffic, which brings up another curious observation.

Three weeks ago we showed that, inexplicably, according to Alexa a whopping 49% of the NYT’s readers were out of China, which was impossible since the US publication is firewalled in China.

Since our public observation, the NYT’s Chinese “traffic” has crashed to just 3.5%, which while still improbable, is far more reasonable.

As a consequence of this, the public-facing NYT traffic has tumbled to the lowest level in a year. It is this, more so than Trump’s twitter feed, that advertisers will be closely looking at when making future ad campaign decisions.

Notwithstanding exclamations to the contrary by its editors, the clouds over the viability of the New York Times have yet to dissipate.

NB: This is not intended to be construed as providing investment advice in any way.

The post Is the New York Times doing as well as it says it is? appeared first on A Simple Fool.

Source: A Simple Fool

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