The New York Times today reported a fall in digital advertising revenues and worse than expected overall results.
Digital ad revenue fell by 2.2% in the third quarter, and were down 2% in the first nine months, with no better news expected in the final quarter of the year.
However, despite the fall in advertising paid subscribers to the digital editions of The New York Times. and sister paper International Herald Tribune, rose by 11% or 57,000 to total 566,000.
The news sent its stock down sharply despite revenues still being up almost 1% to $449m, but it missed analysts target estimates of $479.23m. It’s shares were down by as much as 21.97% to $8.31 wiping more than $300m off of its share price.
One analyst called the New York Times’s numbers “shockingly weak” while Edward Atorino, an analyst with Benchmark Co told Reuters that “the advertising numbers look terrible. I thought they might do a little better. They are caught up in the downslide like everybody else”.
The good news on the paywall front front, however, did bring some good news to an otherwise challenging quarter.
Arthur Sulzberger, Jr, chairman and chief executive officer, The New York Times Company, said: “While our results for the third quarter reflect continued pressure on advertising revenues, total circulation revenues rose led by the ongoing expansion of our digital subscription base.
“Digital subscription trends have remained robust and at quarter end, paid digital subscriptions across the Company totaled approximately 592,000, up 11 percent from the end of the second quarter.”
Overall total digital advertising revenues decreased 2.2% to $44.6m from $45.6m primarily because of lower national display and real estate classified advertising revenues.
No mention if the end of the Olympics played any role in the fall and there appears to be no bump from the presidential election.
Mark Thompson & Jimmy Savile
A the same time Sulzberger said the paper was satisfied that incoming chief executive Mark Thompson, the former BBC director general, had no role in blocking the Jimmy Savile BBC Two ‘Newsnight’ investigation and was not tainted by the scandal surrounding the former presenter and sexual predator.
“I’m sure that you’ve read the recent reports of a controversy regarding the BBC’s decision last year to cancel a news story regarding allegations of child molestation by one of their on-air hosts.
“Mark has provided a detailed account of that matter and I am satisfied that he played no role in the cancellation of that segment…Our opinion was then and it remains that he abides by high ethical standards and he is the ideal person to lead our company,” Sulzberger said.