New York Times Considers Fees for Some Web Content (Update2)
By Greg Bensinger
March 13 (Bloomberg) -- New York Times Co. may revisit charging fees to users for some Web site content to combat the “grim” economic outlook, Chairman Arthur Sulzberger Jr. said.
The company is considering “incremental” charges for Web users while keeping most of its sites free, Sulzberger said at Stony Brook University in New York, where he gave a presentation yesterday. He declined to provide details.
The company’s Internet operations will have to more quickly make up for print advertising declines, Sulzberger said. New York Times has cut jobs, halted its dividend and agreed to a $225 million sale-leaseback of the Manhattan headquarters building after advertising revenue plunged 13 percent last year. It’s seeking a buyer for its minority stake in the Boston Red Sox baseball team.
“The immediate future looks, at a minimum, grim,” Sulzberger, 57, said at the event. “Traditional revenue streams are anemic and getting worse.”
The publisher reported 2008 weekday circulation declines of 3.1 percent at its namesake newspaper and 11 percent at the Boston Globe. In January, the publisher obtained $250 million in financing from Mexican billionaire Carlos Slim in exchange for warrants and a 14 percent interest rate on six-year notes.
Substantial Reductions
The company is making “substantial expense reductions” as ad sales fall, Sulzberger said. In addition to its newspaper Web sites, the company owns About.com, purchased for $410 million in 2005. The site produced $115 million in revenue last year, 3.9 percent of the company’s total.
New York Times gained 10 cents, or 2.4 percent, to $4.25 at 4:15 p.m. in New York Stock Exchange composite trading. The shares lost 42 percent this year.
In February, New York Times Executive Editor Bill Keller said in an online question-and-answer session that the company was considering charging for all or some of the content on nytimes.com, the Web site of the flagship newspaper. Most of the site is free today.
New York Times experimented with charging users for some opinion and editorial content, in a service called Times Select that ran for two years to 2007. At its peak, 200,000 users paid for Times Select and it generated $10 million in revenue.
“During this downturn we have renewed our analysis of how paid content can augment our core advertising business,” Sulzberger said. “The trick, of course, is to garner incremental revenue from the user.”
To contact the reporter on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net
Last Updated: March 13, 2009 16:40 EDT |
