Yesterday's Q2 financial results for one of the most iconic of those long-established media brands, The New York Times, or Gray Lady, seemed to contain encouraging signs for those who believe in the longevity of so-called “traditional” media.
Overall results were, frankly, awful, as The Times posted an operating loss of $114.1 million, compared to a profit of $60.8 million in the same period last year. But this was principally due to a $161.3 million write-down of goodwill at the media giant's Regional Media Group.
It's a function of the declining value of media assets that just aren't worth as much as they used to be, which has to be reflected in accounts. The company is also weighed down by its continuing investment in Fenway Sports Group, and especially that group's acquisition of struggling English soccer club Liverpool.
But if you exclude special items such as the aforementioned write-down, plus severance payments, depreciation, and amortization, the company achieved an operating profit of $82.9 million in Q2, though that was well short of the $92.6 million in Q2 2010.
The section of the statement that attracted most attention was the first real figures for the company's digital subscription packages, which were introduced in mid-March. Paid digital subscribers totaled approximately 224,000 at the end of Q2. Add this to about 57,000 e-reader and replica edition subs, 756,000 home-delivery subscriptions with linked digital accounts, and 100,000 users who get sponsored access via a deal with Ford Motor Company's Lincoln brand, and you start to see the beginnings of a sustainable digital content strategy.
This should be viewed with a note of caution however. The results do not break down the type of digital subscriptions users are signing up to, the yield from those subs, and the contribution to income and revenue. Increased digital revenues will also be offset by a decline in print, especially as users sign up to new packages such as the popular option to just get the print edition at the weekend alongside digital access.
But the commentary around the results confidently stated that “our ability to further monetize our digital content will provide us with a significant new revenue stream in the second half of this year.”
This will be music to the ears of those who believe in a strong “print” media sector and a strong New York Times. In the light of the hacking scandals and travails of rival media group News Corporation's British print media brands, there are those who believe The Times never fully recovered from the Jayson Blair fakery and plagiarism scandal of 2003 that brought the Gray Lady into such disrepute.
Others note that restructuring and disinvestment in journalistic resources have also resulted in a drop in quality throughout the paper.
But if the encouraging digital revenues promised by these Q2 results continue and are invested in content (though maybe that's a naive supposition), that can only be good news for those looking to place their stories into a quality media environment. Getting a story in The New York Times is still, after all, the pinnacle of ambition for many PR pros.