July 22 (Bloomberg) -- New York Times Co. is beginning to stabilize as more people sign up to pay for its online news than expected, according to Evercore Partners Inc.’s Douglas Arthur.
“Because they’ve been free for a long time, they’ve built up this huge audience, they know from years of study and analysis that there is a large group or a subgroup of those unique visitors who are high frequency, dedicated, loyal visitors to the site,” Arthur, an analyst at the investment firm, said in a radio interview on “Bloomberg Surveillance” with Ken Prewitt and Tom Keene.
New York Times Co.’s third-quarter earnings, released yesterday, exceeded analysts’ estimates as customers signed onto the online subscription model and digital advertising sales increased. The company’s stock, which fell below $4 in February 2009, traded at $8.95 today in New York.
The company said July 13 it’s repaying a $250 million loan from billionaire Carlos Slim earlier than planned.
The newspaper publisher attempted to cut costs without lowering its journalistic quality, and the success of its effort to charge for access to its website is the true test of whether it can accomplish that, New York-based Arthur said.
New York Times Co. introduced in March the Web-based subscription model, which requires online readers who view more than 20 articles per month to pay for access to the site’s content. It said it had 224,000 subscribers for the service at the end of the quarter.
“There’s been so much media focus on the New York Times effort, really drawing a line in the sand that they can continue to invest big dollars into high-quality journalism and get paid online,” Arthur said. “You’re seeing a slow but inexorable paradigm shift on the Web as to who is going to pay for what.”
--Editors: Greg Storey, Paul Cox
To contact the reporters on this story: Joe Ragazzo in New York at email@example.com; Tom Keene in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Dave Liedtka at email@example.com