The Grey Lady, as it’s called, might possibly be in the winter of its lifetime. `According to Henry Blodgett’s calculations, the New York Times is burning cash much quicker than it’s making it, and this year might end up defaulting on their loans. Their cash reserves sit at $46 million, and their gross income year over year is down by almost half. Additionally, according to SAI, the NY is “funding operations by rolling over short-term loans–the kind that banks worldwide are cancelling or making prohibitively expensive to save their own skins
Even though New Media barkers like myself have been predicting the downfall of Heritage Media for some time now, the news is no doubt going to be shocking to the public at large.
Not long ago, back in July or so, Duncan Riley wrote over at the Inquisitr that of all the failing Heritage Media formats, he saw the TV format hitting the crapper first. He wrote with a number of compelling reasons that I didn’t necessarily see as invalid, but after considering all the various trends felt the conclusion was in slight need of adjustment:
For instance, newspaper decline is largely financial in nature. Certainly, when you’re talking about business, that’s the most important factor to measure a media type’s life span. Is that what we’re really talking about here, though? The death of the media type or the changing of the guard in terms of the dominant companies behind them. In either event, newsprint and text delivery of news is increasingly being dominated by online blogs and news portals. Circulation may be technically up, but revenues for the companies that resist the transition to online delivery are most decidedly down.
Wise newspaper publications are managing some sort of a transition to an online revenue, but most companies that have their base in serialized news in the printed form still have problems adjusting to the new formats that we in the blogging business take for granted.
Duncan is very positive that newspapers will always go the distance because of the need for quality journalism. Unfortunately (at least for the newspaper industry) I don’t see this as a particularly convincing argument. Quality journalism can and does take place outside of newsprint, and for a much greater profit. Some traditional text journalism outfits may realize this and make the transition. Most won’t.
I hafta say, when I was making the prognostication, I wasn’t thinking specifically of the New York Times. After all, they’ve made significant investments into technology, have recently made themselves a real presence and participant in the blogosphere.
The problem remains, though, that they have a very top-heavy editorial structure, and need to make strategic cutbacks that will allow them to maintain the same editorial output without so much overhead. We talked about this on one of the last Mashable Conversations episodes that Sean and I put out.
As we said in that episode:
This is a year in which newsprint looks far more likely to collapse than we’ve ever seen before. Meanwhile, top-tier blogs continue to prosper and find their niche as virtual magazines. Traditional media magazines seem to see the writing on the wall and are looking to meet New Media halfway.
I don’t think that the New York Times is un-savable, but I think that the print edition and the print-based business model is dead. If you need proof that a transition can be made, simply look to the tons of online-only publications that well into the black.
Business
Clearly, the New York Times isn’t hurting for online traffic, and they’re a very monetizable brand. Very simply, they’re going to need to look at ways of producing the same type of content for less money. This likely means some segregation of the publication from it’s very top heavy corporate structure and a lot of their extraneous business units (like the Boston Red Sox) from the actual publication.
Once they’re able to re-focus on what they think their core business is (being the world’s publication of record), and doing it on time and under budget.
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