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New York Times Company (NYT) |
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WIKI ANALYSIS
The New York Times Company (NYSE: NYT) is a media conglomerate that includes newspapers, Internet businesses, a radio station, and other investments.[1] NYT's other business is its About Group which operates the company's websites like About.com[1]
As a media publication company, NYT earns most of its revenue through advertising sales. Because of this reliance on primarily print advertising sales, NYT has been hit particularly hard by the rise of the Internet as advertisers are increasingly switching to the Internet.
For much of 2009, the New York Times had been looking to sell The Boston Globe, New England's largest newspaper, which it purchased for $1.1 billion in 1993. [2] The highest bid it has received was from private equity firm Platinum Equity for $35 million, plus the assumption of $59 million in pension liabilities, for a total of just $94 million.[3] However, the company announced it had scrapped its plans to sell the Globe, citing an improving financial position following drastic cuts.[4]
Company Overview
The New York Times is a media conglomerate that includes newspapers, Internet businesses, a radio station, and paper mills. The company separates its businesses into two segments: the News Media Group and the About Group.[1] The News Media Group operates the company's publications, which are segmented into the New York Times Media Group, New England Media Group, and the Regional Group.[1] The About Group operates the company's websites including About.com and ConsumerSearch.com.[1] Both segments earn revenue primarily through advertising sales.
Business and Financial Metrics
Business Segments
The following are the New York Times business segments[5]:
hi Ed,this is iedend a conscious decision that we made when drafting the scheme. this is supposed to be about descriptive metadata only. the reason for this is relatively simple. by default cultural heritage institutions do not have the rights to the content that they have in their collection. in many cases the rights to the content rests with the creators or other rights holders. if this is the case the institutions cannot freely chose which license to apply.with regards to metadata the institutions usually have the rights to the metadata (because there is no copyright in factual data and/or because they will have produced the metadata themselves). this means that with regard to the metadata the organisations are free to choose whatever licensing terms they want to apply. Given the above it makes sense to separate these two discussions and that is why we have limited this to metadata. best, paul
About Group
The About Group consists of the Web sites of About.com, ConsumerSearch.com, UCompareHealthCare.com and Caloriecount.com and related businesses.
- About.com focuses on delivering high-quality content that is personally relevant to its users. The Web site has nearly 800 topical advisors or “Guides” who produce original content across more than 70,000 topics and 2.5 million articles. About.com is one of the top 15 ad-supported Web sites in the United States (per Nielsen Online), with 40 million average monthly unique visitors in the United States and 75 million average monthly unique visitors worldwide.
- ConsumerSearch.com analyzes expert and user-generated consumer product reviews and recommends the best products to purchase based on the findings. UCompareHealthCare.com provides dynamic Web-based interactive tools that enable users to measure the quality of certain healthcare services. Caloriecount.com offers weight management tools, social support and nutritional information to help users achieve their diet goals.
- The About Group generates revenues through cost-per-click advertising (sponsored links for which the About Group is paid when a user clicks on the ad), display advertising and e-commerce (including sales lead generation). Cost-per-click advertising is principally derived from an arrangement with Google under which third-party advertising is placed on the About Group’s Web sites.
Trends and Forces
The Internet Threatens Print Media's Survival
The growth of Internet advertising has posed serious challenges to the company's core business, print media. The rise of the Internet has spurred many advertisers to switch from traditional print media to advertising online, a move that hurts NYT's primary revenue source. Since 59% of the News Media Group's revenue comes from advertising, declines in print advertising severely weaken the group's financial performance. Moving forward, NYT must address this shift away from traditional print media to the Internet in order to stay afloat.
In response to the rise of Internet advertising the company acquired About.com, an Internet portal site, in 2005 and has improved its flagship NYTimes.com site as well as other online versions of its newspapers in order to attract online advertisers.
Economic Conditions and Streamlining Costs
In addition to Internet advertising, the company faces additional challenges from two macroeconomic conditions: weak regional economies and increases in newsprint costs. For example, the economic downturn in 2008 further exacerbated NYT's advertising problems as many advertisers were forced to cut advertising costs, which then added to NYT's drop in advertising revenue.
Furthermore, Newsprint prices greatly affect operational costs for the New York Times Company. To mitigate price increases, the New York Times Company switched to lighter newsprint and redcued the amount of newsprint used in its publications.
High Quality Content
One key asset for the company is its content, as it continued to produce quality news (the New York Times newspaper alone has won 98 Pulitzer Prizes[6], more than any other newspaper) and develop non-news assets such as travel and style. The New York Times Company draws much of its business, both in terms of advertising and circulation, through the quality of its content. The paper has an outstanding reputation for quality journalism and the New York Times Company has won 115 Pulitzer prizes, outdoing any other news organization.[7]
Competition
The New York Times Company's serious print competitors include the Wall Street Journal (owned by News Corporation (NWS)) and USA Today (owned by Gannett (GCI)). It also faces some competition from papers such as The Washington Post. A key advantage for the New York Times Company is its strong reputation for quality journalism, which helps to sets it apart from others.
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