The New York Times may have posted some disappointing financials this week, with subscriber growth slowing significantly, but its focus on working out new ways to package its journalism and find new audiences still makes sense.

Total second quarter revenue was down 0.6 percent at The New York Times Company, from $390.9 million to $388.7 million, while net income plummeted -54.4 percent from $20.1 million to $9.2 million.

Circulation revenue was up 1.4 percent to £209.8 million, but advertising revenue dropped 4.1 percent from $163 million to $156.3 million. Print ad revenue decreased 6.6 percent while digital ad revenue increased 3.4 percent to $41.5 million.

Operating costs also rose 5.2 percent to $362.7 million, “mainly due to higher compensation and benefits expenses and marketing costs associated with the strategic initiatives,” meaning the unbundled offerings of NYT Now and NYT Opinion.

nyt revenue q2 2014 finance

Digital subscriber growth stall

The NYT did manage to add 32,000 subscribers to digital-only subscription products, making the total now some 831,000, but the paper admits the majority of that new growth is from the newly released NYT Now, NYT Opinion, and Times Premier products, which suggests core subscriber growth has tailed off, and subscribers to those new products aren’t as high as the company hoped for.

“We’re encouraged by the reaction of users to the products, especially the high consumer satisfaction levels we’re seeing with the NYT Now app. But, while we expected the portfolio to take time to build, we want to accelerate the rate of growth in subscription sales, so over the coming months, we will refine some of the offers and the way we market the portfolio to accomplish this.”

Q2 isn’t traditionally the strongest quarter for the Times, and it did say following the last quarter’s results that Q2 would be a bit of a struggle, but that’s a significant tailing off in core subs growth.

More repurposing

Those unbundled NYT Now, NYT Opinion, and Times Premier offerings have only been up and running for a couple of months however, and there should be some eventual upselling to the full subscription offerings.

If the NYT wants to preserve the number of journalists it has and the quality of the output, it’s going to have to try and come up with more ideas to raise revenue but use the same content. One of those ways looks to be a shorter, cheaper version of the paper that would be roughly half the content and half the price, reports Capital New York’s Joe Pompeo.

It’s also likely that we haven’t seen the last of the unbundled products from the NYT yet. Digital offers a major advantage – content can be repackaged and repurposed and split and sold in a variety of different ways to different audiences – that print cannot accomplish without far higher production costs. Although the company undoubtedly still has legacy print issues, it is, at least trying new things and experimenting.

Despite the fact digital ad revenue is heading in the right direction it’s unlikely digital will ever replace the revenue print ads still pull in. That’s not to say the company’s work in areas such as interactive native ads isn’t a good idea. It just means working out more ways to sell its journalism offers a more promising route.

The worst thing to do would be to sit back and not experiment, and although this isn’t a good set of results for the Times, no one can accuse it of doing that.