NYT subscribers, not advertisers, are funding the show

As the New York Times publishes its quarterly profits report, it looks like the Gray Lady is making more from circulation (suscribers, newsstand readers) than advertising.

This means two obvious things: (1) Advertising is nose-diving, and fast. (2) Charging as much for the Sunday Times as it costs to drive across the state of Massachusetts was apparently worth it.

While newspapers as a whole are having trouble figuring out how to remain profitable, the Times has an interesting angle to work: it has a loyal, high-end, well-educated readership. Traditionally, this meant it could count on advertising dollars. But now it also means that the paper may be transitioning into that era that has been theorized in journalism classrooms but hasn't seen daylight thus far: readers being willing to pay more for a specialty publication.

It's no longer mass media time, with the Times reaching out to the world and expecting a wide swath of readers to peruse its pages and pull in its advertisers. The Times' readership has become a distinct group, and many have been clear that they're willing to pay the outrageous subscription prices to keep getting the top-notch newspaper.

(If you think jacking up prices is a mistake, I would say you're right for most papers. But the Times is a unique product. Think about how much more people pay for a specialty periodical than their typical off-the-rack Time or People magazine...around 150-175%. So, the Times can get away with it because it's going for that up-scale slice.)

(But also remember that if this transition does happen, the Times still may lose readers in the process as it separates the wheat from the chaff.)

Could it be that this is what the Times missed all along? That the way to fund its paper was to, in fact, charge the people who really wanted it?

Whether the Times comes out as a smudgy broadsheet, an Internet edition, an online TimesReader edition, or in comprehensive reports published by the best reporters in the world, it will have readers. To stay afloat and fund this content and reporting, now all the Times has to do, apparently, is charge them more.