In the solid second quarter earnings report from The New York Times yesterday, one of the more noticeable numbers was the 21 percent increase in digital revenue. It made about $50 million in revenue from its “news media” division, which if annualized, comes out to $200 million a year, most of which comes from the NYT’s website.
Business Insider CEO Henry Blodget broke down the report, saying the numbers show that The New York Times will last, but only as a digital company. The problem, the $200 million the company currently spends on its newsroom. His conclusion does not bode well for NYT employees.
The NYT digital business can probably sustainably spend about one-third of its revenue on its newsroom. So if and when the NYT digital business hits $200 million of annual revenue, the NYT will then be able to spend about $75 million on its newsroom.
Which is decidedly less than the $200 million it currently spends.
Which means that, if if [sic] the print business eventually goes to zero, there are more big painful newsroom cost cuts coming.
Those “painful newsroom cost cuts” means layoffs. Could that be the price the company pays for long-term survival? Blodget does continue, saying these revenues, along with the proper stripping of the newsroom would create “one hell of a newsgathering operation.”
So journalism is alive at NYT, but the jobs might be gone for good. Hmm, that’s not as upbeat of a report as first thought, I guess.