Go to wwwnytcocominvestors and check New York Times Companys

Go to www.nytco.com/investors and check New York Times Company\'s recent financial reports. Is the business model working effectively? Can the company\'s business model remain sound as more consumers go to the Internet to find general information and stay abreast of current events and news stories? Is its revenue stream from advertisements growing or declining? Are its subscription fees and circulation increasing or declining?

Solution

Analysis of the recent financial statements like 2017-3^rd quarter results and the company’s annual report for the year 2016 shows that New York Times Company’s business model is effectively working now after a few initial hiccups when its business model was weathered down by movement of consumers rapidly towards internet.

The company is increasing its share of digital subscription revenues and reducing its dependence on print advertising revenues. In fact for the third quarter of 2017 the company’s operating profit increased to $33 million compared to a year ago figure of $9 million. Even though the company’s print advertising revenue is declining it is more than making up for this loss by increase in digital advertising and digital subscriptions.

Decline in print adverting revenue caused a 9% decline in total advertising revenues for the company. The company, going forward, plans to grow its share of online and digital revenues and its advertising revenues are expected to start growing again from 2018 onwards. In fact for the third quarter of 2017 the company’s digital advertising revenue increased by a strong double digit figure of 11.0 percent.

The company’s offline/print circulation is decreasing and this is normal as per the recent trend of decline in print media in developed economies and nations. But the company increased its paid only digital subscriptions by a figure of 154,000 to end the third quarter with a figure of 2,487,000 paid digital subscribers.

The company has been able to tweak is business model appropriately and will be in a good position to increase its digital subscriptions and digital advertising revenues as it looks at offering content that is branded as well as programmatic in the cyberspace.