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The New York Times Co.'s Digital Worries

While circulation was a bright spot during the period, the company didn’t have as much success on the ad side.

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DIGITAL WORRIES: One year after installing its paywall, The New York Times Co. on Thursday said 472,000 total paid digital subscriptions have been recorded. This upward trend in digital contributed to a total circulation increase of 9.7 percent. It will be interesting to see if momentum continues during the second quarter, as readers adjust to receiving 10 free articles a month instead of 20.

While circulation was a bright spot during the period, the company didn’t have as much success on the ad side. Print ad revenues fell 7.2 percent and digital ad revenues dropped 10 percent, largely due to declines in The About Group. During a quarterly earnings call with investors, executives pointed to a shift in psychology in digital ad spending that’s become similar to print. Up until the middle of last year, digital seemed insulated from potential economic concerns but that advertiser mind-set has changed and digital is just as sensitive as print to fears of, say, a double-dip recession.

The company reported a dramatic rise in net income during the first quarter to $42 million, compared to $5.4 million a year ago. This was largely due to the sale of its Regional Media Group, resulting in a substantial tax benefit.

Investors asked about the “dramatic drop” in ad pages at T: The New York Times Style Magazine and The New York Times Magazine. According to Media Industry Newsletter, both titles are down 11 percent, year to date. Executives claimed both titles are feeling the same pinch as the rest of the magazine business, although T is doing slightly better.

Near the end of the call, one analyst asked chairman and publisher Arthur Sulzberger Jr. if he would be willing to step into the role of chief executive officer, since the position has not been filled following the departure of Janet Robinson. He didn’t bite. “We’ve made progress on the search for a new ceo,” he said, adding the company will take its time in order to find the right person.