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The New York Times Co.'s digital subscriptions business continues to grow at a steady pace, but it's not enough to offset bigger declines in advertising revenue at The New York Times, The Boston Globe and The International Herald Tribune, the company indicated in its third-quarter earnings statement released Thursday.
Collectively, the three papers added approximately 83,000 digital subscribers in the third quarter, bringing the total number of subscribers to 592,000, an 11% increase from last quarter. The bulk of those new subscriptions -- 57,000 of them -- were purchased from The Times and IHT.
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Both print and digital advertising revenues continued to decline at 10.9% and 2.2%, respectively, resulting in an 8.9%, drop in overall ad revenue "largely due to the challenging economic environment, ongoing secular trends and an increasingly complex and fragmented digital advertising marketplace," the Times Co. said. Its real estate classifieds were the hardest hit, dropping nearly 20% year-over-year. Digital advertising now makes up nearly a quarter of total Company advertising revenues, up a few percentage points from the same period a year ago.
Circulation revenues increased 7.4%, thanks to increases in digital subscription sales and print subscription pricing for the Times and the Globe. The Company decided to erect metered paywalls around its news websites in late 2011 in an attempt to offset foreseeable declines in advertising revenues with gains in circulation revenues.
Total revenues declined 0.6% to $449 million year-over-year. Net income was $2.28 million, or 2 cents per share -- an 85.4% drop from the third quarter of 2011, when the Times Co. sold off a number of investments. Operating profit declined 59.6% to $8.51 million year-over-year.
Shares of the Times Co. were trading down 13.5% to $9.20 late Thursday morning.
The Company is expected to welcome new CEO Mark Thompson on Nov. 12, but some -- including New York Times public editor Margaret Sullivan -- are questioning whether Thompson's offer should be revoked because of a sexual abuse scandal that occurred under his watch at the BBC.
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