Total circulation for the New York Times has stagnated over the last five years at about 1,130,000 for the weekday edition nationwide, according to the Company’s 10-Ks. 2005 has not been reported yet, but the prior four years were 1130, 1143, 1132, and 1125.

During that period, the Times engaged in an amazing business practice for a company in a stagnant market: it raised its prices far above the rate of inflation. Increases were as follows, beginning with 2000: 7%, 7%, 6%, 7%, 6%, 5%.

You might expect the big price increases to yield large increases in advertising revenue to the Times. You would be wrong. Advertising revenues at the Times have stagnated, despite a cumulative 35% increase in prices. We do not yet have 2005 numbers, but beginning with 1999 the advertising revenues were (in millions) $1175, $1306, $1099, $1119, $1184, and $1210.

Taking 1999 as the base year and applying the price increases through 2004, if the Times advertising volume had stayed constant, we would expect the advertising revenue at the NYT to have been $1617. Instead, it was only $1210 — a loss of almost $400 million in ad revenue at current prices from what the Times had in 1999.

We know it is hard to make sense of so many numbers on a page, and if you have presentation suggestions, we’d like to hear them. However, our main point isn’t complicated at all. If sales of Toyota Corollas were stagnating, would you expect Toyota to relentlessly raise prices year after your, or would you expect Toyota to cut prices and ad features to stimulate sales? Which would be the better business policy? Which would be the better run business?

This entry was posted on Wednesday, January 18th, 2006 at 8:34 pm and is filed under business, General, MSM. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.