The paper of record is making progress in its struggle to wean itself off paper, but it’s still facing a lot of red ink. The New York Times Company (NYSE:NYT) reported flat third-quarter revenue and a dramatic operating loss on Thursday, citing costs associated with its latest round of buyouts and layoffs as well as a sluggish start for its new digital subscription products.
The newspaper company reported an operating loss of $9 million for the period ended Sept. 30, a 66.1 percent decline from the same period last year, when profits were up $12.9 million. Quarterly revenue was up 0.8 percent to $365 million.
The loss comes one month after the Times Co. announced it would eliminate about 100 jobs from its newsroom, offering buyouts to eligible employees but also resorting to layoffs if necessary. It was one of a number of newsroom cuts the company has made over the last six years. As a result, administrative costs rose 13.8 percent to $193.1 million for the quarter.
Earlier this year, the Times announced new digital products, including a mobile news app called “NYT Now.” But Ravi Somaiya, a media reporter for the Times, wrote Thursday that the products “have not caught on as the company had hoped.”
Despite the sluggish start, Mark Thompson, the Times Co.’s chief executive, said the company’s quarterly performance was “better than expected” and remained optimistic about the Times’ overall digital strength. Total digital subscriptions were up 20 percent, a net addition of 44,000 and the best quarterly result in almost two years. Thompson said digital advertising remains solid and credited the company’s recent foray into sponsored posts, or native ads, as they are sometimes called.
“Our solid year-to-date digital advertising performance is the result of deliberate execution on our strategic plan, including the introduction of Paid Posts, recent investments in areas such as video, growth on the smartphone platform and the momentum of our restructured advertising team,” Thompson said in a statement.
Some 875,000 Times subscribers now get the paper exclusively online. The company said quarterly circulation revenue from digital-only subscriptions was up 13.3 percent to $42.8 million. That, combined with an increase in home-delivery prices, offset a decline in print copies sold, the company said.
The Times is in a race against time to transform itself into a digital-first news brand as it weans itself off its reliance on dwindling print advertising revenues. The company no longer separates digital and print ad revenues on its earnings releases, and earlier this year it commissioned an “Innovation Report” that stressed a need to embrace innovation over the status quo. The report went viral after it was leaked to BuzzFeed.
Read the full earnings report here.