The New York Times Company announced their 3rd quarter outlook this week  which left Wall Street disappointed and caused analysts to wonder if the company didn’t need a new strategy to survive.

The company said it expected to see an overall revenue decrease of 2-3% with print ad revenue dropping another 5% with circulation revenue dropping by a similar amount.

For the Times the circulation revenue drop was yet another sign that the paper’s management is very shortsighted.  Initially the price increases juiced revenue and made it look like a smart idea.  But the recent decline in circulation revenues has totally wiped out those gains and will only erode even more in the future.

Surely the Times’ management must have known that increasing the price for the printed page was nothing more than a short term fix especiallmey in light of the trend towards digitally delivered news.

This reminds me of what Newsweek did when they reformatted the magazine and raised subscription prices  in an effort to dump unprofitable subscribers.  But that strategy failed as the magazine continued to lose money and was eventually sold for $1 plus the assumption of liabilities.

If the Times isn’t careful they too could wind up on the auction block or be taken over by major investor Carlos Slim who is more interested in making money than preserving that paper in its current form.

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