Arthur Sulzberger: "Why do readers continue to embrace print?"

The latest in-house memo from Times honchos Arthur Sulzberger Jr. and Janet Robinson is just out. In it, they explain that their circulation revenue has increased-no wait, they carefully say that circulation revenues “make up a greater percentage” of their income than it has historically. This is, how you say, a way of saying that advertising is way down, perhaps! Anyway, read on, if you’re interested in the future of the Times.

On the Record . . . From Arthur & Janet

Vol. 3 Our Circulation Strategy

September 14, 2009

To Our Colleagues,

A reader recently wrote, “I feel that the importance of The Times is so
great that I would pay $70 million for access to the most important paper
in the free world.”

We appreciate the thought but while things are difficult for newspapers,
they haven’t reached that point.

As our advertising revenues have declined, we have asked our readers to
bear more of the cost of our journalism, as many other newspapers have done
with their readers. They have demonstrated a willingness to do so. As a
result, in the first half of this year we have seen gains in circulation
revenues at The Times, the Globe, the Sarasota Herald-Tribune, the Santa
Rosa Press Democrat and some of our other regional newspapers. In this
issue of On the Record, we’ll talk about our circulation strategy and how
it has improved our financial results.

Let’s start with our underlying premise. We believe that we provide very
high-quality news, information and entertainment to our readers. We also
believe that our premium quality journalism warrants a premium price. This
is why we have experimented in the past with online subscription models.
It’s also why we continue to explore ways to derive more revenue from our
digital content than we get from the advertising and other secondary
revenue streams we have today. We plan to discuss that in a future issue
of On the Record.

Today circulation revenues make up a greater percentage of the Company’s
revenues than they did in the past. Five years ago, advertising accounted
for 67 percent of our total revenues and circulation made up 27 percent.
In the second quarter of this year, advertising totaled 54 percent of our
revenues and circulation was 39 percent. Circulation revenues have grown
to the point that last year they were the highest they have been in our

We don’t mean to suggest that there have not been any cancellations or that
circulation volume hasn’t declined. It has. But there have been far fewer
cancellations from price increases than we expected at both The Times and
the Globe. The reader retention rates for The Times and the Globe are
enviable – for subscribers of two years or more, the rate is roughly 90
percent for both papers. In fact, The Times has more than 830,000 readers
who have subscribed for two years or more, up from 650,000 in 2000.

Some of the volume declines at our newspapers are attributable to our
deliberate strategy of focusing on individual readers who pay to get their
paper rather than discounted copies, such as those distributed at hotels,
conventions and other venues. Advertisers value these individual readers
since they are deeply engaged with our newspapers.

Why do readers continue to embrace print? The reason newspapers have
endured for more than 400 years is because they work. People understand
how newspapers are organized – if a story is above the fold, it’s more
important than below the fold. If it appears on the front page, it’s more
newsworthy than one inside the paper. Readers enjoy the serendipity of
finding something new that they didn’t realize they were interested in but
discovered in the pages of their paper. Newspapers are portable. They
offer a point in time assessment of the news.

In order to get The Times in the hands of even more readers, we are working
with organizations across the country to print and distribute the paper.
Most recently we announced a new agreement to print The Times in Nashville,
enabling us to expand newsstand and home delivery to readers in the area
and to better serve our current readers in Tennessee, northern Alabama,
northern Mississippi, eastern Arkansas and western Kentucky. Today The
Times is printed at 26 locations across North America.

We expect the print editions of The Times, the Globe and our regional
newspapers will be around for years to come. But we are a news company,
not a newspaper company. We are committed to offering our consumers our
content wherever and whenever they want it and even in ways they may not
have envisioned – in print or online – wired or mobile – in text, graphics,
audio, video or even live events. Because of our high-quality journalism,
we have very powerful and trusted brands that attract educated, affluent
and influential audiences. These audiences are a true competitive
advantage as we move into an increasingly digital world.

We hope this is helpful in understanding our circulation strategy. If you
have any questions on this or other issues, please send us an e-mail at: a

Arthur & Janet