Best news of the week:
NYT Co. to pay dividend
Amazon Founder Jeff Bezos bought The Washington Post at a fire-sale price in August. Click image to enlarge.
WITH ALL THE DEPRESSING news – the Syria crisis and now the debt ceiling crisis – the announcement after the market closed Thursday from The New York Times Co. was without doubt the best news about newspapers in ages.
Pontificators have been predicting the demise of daily newspapers for a decade: Like others, I have said, repeatedly, those that adapt well to the internet age by providing “indispensable journalism” (Warren Buffet’s term) will survive and thrive.
The New York Times is leading the way. On Thursday it announced it was restoring its dividend, suspended since 2008.
This is the clearest signal yet that the Gray Lady is successfully adapting its business model to the new realities of publishing in the Internet age.
It comes after a decade of stern warnings that the end of print media in general – and daily newspapers in particular – was approaching rapidly.
Watch a video below the fold.
THOSE OF US WHO WATCH newspapers closely, however, have not been as dismal about the future as many others, inside the business and out.
The first clue I had about the potential at The New York Times came in this column by Public Editor Margaret Sullivan in January. Click image to enlarge.
The first clue for me, reported several times previously on In the (K)now, came nine months ago when The New York Times Public Editor Margaret Sullivan reported on Jan.19 in A Milestone Behind, a Mountain Ahead that 2012 was a watershed year for the paper.
“In 2012, something remarkable happened at The Times,” she wrote.
“It was the year that circulation revenue — money made from people buying the paper or access to its digital edition — surpassed advertising revenue. That’s an upside-down and through-the-looking-glass situation for newspaper economics. For many decades, print advertising has been the big moneymaker.”
Her column actually began with a note to readers which, really, explains its success:
“A NOTE to Times readers: You matter. And you matter now more than ever before.”
Later she added:
“Much of The Times’s future is tied to readers’ willingness to keep paying for its offerings in print, and for more readers to be willing to pay for digital access.”
She then mentioned the second richest man in America, who has spent well over $300 million in the last couple of years snapping up daily newspapers around the country.
“My former boss, Warren Buffett, is fond of saying that newspapers, if they are to survive, must make themselves indispensable.”
The BBC story on The New York Times Co. announcement that it was restoring its dividend. Click image to enlarge.
There can be no argument that The New York Times has continued to provide “indispensable” journalism, and that, in great measure is the reason for its success.
After reading that January column, I ran out and bought stock in the company. At the market close on Thursday, before the stunning dividend announcement, it was up 31 percent (51 percent annualized).
I am laughing all the way to the bank.
IN THE PAPER’S own announcement (since widely reported in dozens of media outlets) New York Times Company to Pay a 4-Cent Dividend Christine Haughney reports:
“The New York Times Company announced on Thursday that it would pay a quarterly dividend to its shareholders for the first time in five years.
“In a statement, Mark Thompson, president and chief executive of The Times, said that the board had concluded “that the strength of the balance sheet justified the restoration of a dividend.”
It’s not just the balance sheet that is strong; so is the journalism, every day.
Former San Francisco Chronicle Editor Phil Bronstein was wrong in his appearance on MSNBC just after the sale of The Washington Post. Click image to enlarge.
Meanwhile, back in August, the sale of The Washington Post to Amazon founder Jeff Bezos evoked an outpouring of the same pessimism for print media and daily newspapers that has been prevalent since Craigslist upended the business model by decimating newspapers’ classified advertising revenue more than a decade ago.
In an appearance on MSNBC titled Bezos and the future of newspapers former San Francisco Chronicle Editor Phil Bronstein was just as glum as all the other doomsayers. (Watch a video clip from the show below.)
Emily DeCiccio reported:
“The fate of the Post is now in Bezos’ hands, but Phil Bronstein, the executive chair of the Center for Investigative Reporting, said … that it “doesn’t mean that a guy who knows how to sell everything and sell it well, will know what to do with newspapers.”
“Bronstein attributes the decline of newspapers not only to the failing business model but also to newsrooms and journalists becoming separated from the public they are meant to serve.”
Bronstein clearly had not been paying attention to what was happening at The New York Times – and at a few other papers that were reinventing the business model.
“The longtime journalist suggests a philanthropic businesses structure as a solution to newspapers’ broken business model: “Because of the public service aspect, that philanthropy is a way to go.”
Bronstein, fortunately, is being proven wrong.
In fact, he might have been asleep at the switch.
JUST THE DAY BEFORE he spoke, The New York Times itself provided great reason for optimism in a story buried in the business section, and reported on In the (K)now in New York Times turns the spotlight on itself.
The New York Times story was headlined: After Post Sale, Spotlight Shines More Intensely on The Times.
The Wall Street Journal, arch-competitor of The New York Times, carries the story of its dividend today. Click image to enlarge.
James B Stewart reported August 9: “Great journalism takes courage. It takes a sense of public mission. It takes independence. It takes time. Perhaps most of all, it takes money.”
He then noted the pessimistic side of the sale of the Washington Post.
“This week’s announcement that the Graham family had decided to sell The Washington Post … surely quashed any lingering doubts that the old model is all but dead.”
But then the good news:
“A week ago, The Times reported quarterly operating earnings of $77.8 million, up 13 percent from a year earlier.
“By contrast, The Washington Post’s newspaper division had losses of $53.7 million last year, with no end in sight.”
Thursday’s announcement from The New York Times Co. was a hugely positive development for daily newspapers everywhere.
It is becoming increasingly obvious that those who provide “indispensable journalism” and find a way to monetize their online content are those that will survive this wrenching transition.
This should be a wake up call to all the other dailies that are falling behind the curve. Thank goodness the one I read over breakfast every day – and online many times during the day – seems to have bucked the trend.
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