Print journalism has been struggling financially over the past few years, as is evident. Why wait a day later to read about world events in a newspaper when your friends on Facebook can inform you in real time quicker than super-fast, billion-dollar television networks?
Yet speed isn't everything. There's always a need for news analysis, as well as for platforms to provide information readers might not find, such as original reporting. Exclusive stories are a good thing, too. That's where newspapers come back in.
The New York Times Co. (NYT), for instance, is finally rolling out digital-subscription packages with the aim of signing up more paying customers. The company hopes it will reap profits down the road and offset the negative effects of a weak economy and dwindling print advertising.
The company says it is off to a good start. "Digital-subscription packages on NYTimes.com and across other digital platforms have been well received, and approximately three weeks after the global launch, paid digital subscribers have surpassed 100,000," the Times says in an earnings statement.
"So soon after the launch, the company does not yet have visibility into conversion and retention rates for these paying customers after the initial promotional period, although early indicators are encouraging."
For the first quarter of this year, the company's total revenues decreased 3.6 percent to $566.5 million from $587.9 million. Operating profit was $31.1 million in the first quarter of 2011 compared with $52.7 million in the same period of 2010.
Analyst Leo Kulp at Citi called the number of subscribers needed to offset lost advertising revenue "surprisingly low" in a research note, upgrading NYT to buy.
"Revenue generated by an annual digital subscription will likely dwarf the advertising revenues generated by even heavy users," Kulp wrote. He is targeting $11.50 per share.
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