Sinking in the Rising Tide

Take a look at the attached stock price chart and you get some idea what it must feel like to be one of the owners of the New York Times. Over the past couple of years, the poor souls who were trusting enough to buy into the New York Times Company have been repeatedly beaten with a stick. Stock in the Times Company lags the Washington Post, the Dow Jones Industrial Average and, worst of all, Rupert Murdoch’s Newscorp by a mile. No doubt you can find a worse investment, sub-prime mortgage companies perhaps, but it would hard to do so.

It’s not just a newspaper thing. The Post is a newspaper too. Yes newspapers are having a rough time, but the time is rougher for some than for others. Overall newspaper circulation is down, but The New York Times and the Los Angeles Times have taken much heavier hits than the industry as a whole. Some papers, such as the Wall Street Journal, have basically held even, and the New York Post (heavens, Murdoch again!) has actually grown.

Yes, there’s been a migration of readers from print to internet, but the Times is on the internet, and the Times has (up until last week) charged for some of its most popular internet content. It’s not that internet users are all libertarian geeks or rich Republicans, either. The biggest daily blogs on the web are hard left.

Speaking of the policy of charging for content, the Times tried that experiment for two years under the name TimesSelect. As the attached chart shows, it didn’t seem to help much. They discontinued TimesSelect last week and things got even worse. So, it’s not the internet content pricing model that’s the problem.


It’s not economic or demographic conditions either. US population is growing at a rate of almost 3 million per year and the economy has been expanding rapidly since 2003 (despite the Times predictions to the contrary). And it’s not local demographics, The New York Times and the New York Post are both headquartered in, well, New York.

It’s not a labor-cost problem — The New York Times Company announced that it was firing 500 staffers and selling off non-performing assets in 2005. Incidentally, while they have been laying people off like crazy to boost productivity, they’ve been editorially wagging their fingers at the rest of America for failing to let productivity gains trickle down to the workers.

Around this time they also announced major initiatives to cut the cost of paper. While they offered no specifics, this almost certainly means they chose to use the lower cost of Chinese paper, which many other large newspapers have turned to in order to reduce costs. Once again, they have continued to editorially wag their fingers at us about mounting trade deficits, especially with China.

So, if the problem isn’t the global environment, the local environment, the labor environment, technology, the subscription model or regional conditions, perhaps it’s the newspaper. Could the problem be that the New York Times has a liberal bias? Perhaps. Circulation declines tend to support that idea. If I were an investor, I’d wonder whether general readers are nearly as interested in endless hyper-detailed reporting about Abu Grahib or the alleged Valerie Plame ‘outing’ as the editors seem to be. One wonders whether obsessing over such stories is the best way to separate Mr. and Mrs. America from their dollar and 25 cents Monday through Friday. Or a gusher of gushing praise over "Brokeback Mountain" the way to get four dollars from them every Sunday.

Perhaps the problem is also style. The opinion content has become increasingly bloggy in recent years. It seems as though Paul Krugman (who, by way of full disclosure has attacked me twice this year in his columns) and Frank Rich have gone from respected commentators to reliable Democratic-base rousers. The problem is that these blog functions are done better by actual blogs. If you want Bush hatred, you can get it shorter, angrier and free in about a million other places. Who needs the weekly Krugman, when they’ve got the Daily Kos?

The New York Times built its reputation by being America’s newspaper of record. If something big happened, it was in the Times. But that’s the Old New York Times. The new New York Times routinely ignores UN corruption stories and Democratic scandals far longer than other publications.

The other part of the newspaper-of-record spiel is the reprinting of original source material. It’s why I, for many years turned to the Times. Presidential speeches, debate transcripts open letters, classified Pentagon documents, Papal addresses — you name it, you could get the real and full text in the Times and usually nowhere else. That’s why I went there in years past. That’s why I don’t go there anymore. All that stuff is now ubiquitous on the web. I get the President’s speeches automatically downloaded to my ipod every morning. The Vatican has a web site. There’s market data on my cell phone.

So the Times no longer covers all the important stories. The reprinting of important speeches is now done much better elsewhere. They no longer represent the establishment views on the news, but those of the hard left. However it’s writing is much duller than the rest of the hard left. People don’t subscribe anymore, and they don’t want to pay for boilerplate leftie commentary the way they pay for useful data in the Wall Street Journal or the Financial Times. If I were one of the owners, trapped in the downward slide, it seems to me that I’d be wondering if the New York Times has any point at all. “If the paper didn’t exist”, I’d ask the management, “would there be any reason to invent it?” A glance at the stock chart shows that to this point, no reason has been given.