New York Times Aims Beyond Its Home Base

NEW YORK —  The subbasement at the New York Times headquarters still smells faintly of printer’s ink, a souvenir from the era when nine old Goss printing presses rumbled into action each day to publish one of the most powerful newspapers in the world.

Now, the massive machines have been retired from service, with today’s edition being the final one to roll off the last of the old presses.

With that final switch and a modest ceremony, the New York Times will no longer be printed in Manhattan. And even though executives and journalists remain upstairs at the Times Square offices, the move to modern printing facilities in Queens and New Jersey serves as a fitting symbol for the direction of the newspaper under its 46-year-old publisher, Arthur Sulzberger Jr.

Under “Young Arthur,” as he is often called in contrast to his father, Arthur Ochs Sulzberger, who is chairman of the New York Times Co., the paper is increasingly pushing outward, beyond the city, beyond the metropolitan New York area, to a lush national market of “premium” readers. And in the process, Sulzberger is indirectly raising new questions about how Americans will get their news in the future.

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Sulzberger and his managers resist the idea of the Times as a national newspaper (it is a New York paper circulated nationally, they protest). Nevertheless, from Chicago to Los Angeles to tiny communities like Fryeburg, Me., the New York Times is busily searching for more readers and advertisers.

“We have a continent to conquer here,” Sulzberger joked recently as he talked about the paper’s long-term national strategy.

The New York Times in many ways already stands as the nation’s premier newspaper. It has the largest daily circulation, with 1.1 million on weekdays and 1.6 million on Sunday. (The Wall Street Journal and USA Today, which have larger circulations, are both published only five times a week).

The Times, with its lofty slogan that promises “All The News That’s Fit to Print,” has won more Pulitzer Prizes than any other newspaper--74 since the top prizes for American journalism were first awarded in 1917.

It has evolved considerably from the strait-laced journal that once refused to allow a writer to quote from a rock ‘n’ roll song because that would require printing sentence fragments. In addition to politicians and diplomats, today, authors and actors, restaurateurs and shopkeepers all read the Times like a report card on their daily progress. Other news organizations--especially network news operations--follow its lead.

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On the business side, this all translates as a “premium brand” that can be marketed to “premium” readers and sold at “premium” rates to advertisers, as Times executives explain it.

Sulzberger sees that brand strategy as his ticket out of the malaise that has affected many in the news business recently, including the New York Times.

Consumers have been fickle, dropping their morning read in favor of television or the Internet or the headlines on radio. The Times has lost 100,000 Sunday subscribers and 50,000 daily subscribers in the past year, a drop that executives attribute in part to higher subscription costs. The Times also has faced stiff competition from tabloids and has struggled to keep young New Yorkers from straying elsewhere in their search for “hip” news.

In many newspaper organizations, such setbacks have brought out the meat cleavers. Employees have been laid off, papers folded, extra sections or expenses put on hold while the corporations struggled to save money and court stockholders.

“What we are seeing here is that at a time when most newspaper companies are doing their belt-tightening, the New York Times is clearly making bigger investments,” said John Morton, a newspaper analyst in the Washington, D.C., area. “Ultimately, it’s probably a very smart strategy.”

The boyish-looking Sulzberger, who took over the newspaper from his father in 1992, is gambling that with the completion of a $350-million printing plant in Queens and the spending of $20 million to boost circulation outside New York City, his executive team will drastically improve the paper’s financial well-being into the next century.

To revive circulation in the New York area, the Queens plant allows for later deadlines and thus fresher news. It promises better color and allows the paper to add as many as six new sections for the city by the end of the century.

Some of these sections are still unnamed, but the idea is to “find another science section,” as Sulzberger puts it. The creation of the Tuesday science section in 1976 suddenly tapped into a rich lode of advertising from the computer industry.

The younger Sulzberger is also promising a little rouge and lip gloss for the Gray Old Lady of 43rd Street: The front page in New York will feature the paper’s first color photograph sometime before the end of the year. For fans of the old black-and-white version, Sulzberger says: “Don’t worry. We’re the New York Times, remember? We can make even color boring.”

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But for some analysts looking at the future of the paper, it is the area beyond New York City that looks so intriguing. The Times’ national edition, started in 1980, has been the source of 95% of the paper’s circulation growth during this period, according to the latest Times annual report.

The national edition is a smaller, remade edition of the metropolitan edition, including the national and international reporting, business and cultural news, and “everything else that travels,” said Times Executive Editor Joseph Lelyveld.

Satellites beam its pages to 12 contract printers around the country. The Times is now selling about 424,000 papers daily and 689,537 on Sundays outside the metropolitan New York area.

“It’s clearly their sweet spot now,” said Brian Oakes, who analyzes media stocks for Lehman Brothers Inc., a financial services firm. Oakes notes that besides the circulation growth, the paper now generates almost 60% of its advertising nationally.

Such good news is recent, insiders say. A few years ago, the Times reportedly lost so much money on its national edition it was often seen by other publishers as a kind of vanity press--an expensive form of public relations for the New York Times news operation. Each time the paper added a reader, it lost money.

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So the company launched the “premium quality for premium price” strategy beginning in 1994. Premium price meant $1 for a daily copy and $4 on Sunday, and in some areas now, readers pay $500 a year for a seven-day delivery of the paper.

The national edition now makes money, Sulzberger says. “Our readers needed to pay more of the freight, and they did just that,” Sulzberger told Wall Street analysts Tuesday.

The national effort is augmented by a sizable investment in a World Wide Web site, which Editor & Publisher magazine this year proclaimed the best newspaper location on the Internet. “The big Kahuna,” said E&P;’s Hoag Levins. In an early sign of brand-name success, 3,500 international readers are paying an impressive $35 a month to access the site.

With high-brow readership in tow, the paper decided it could ask advertisers to buy the more-expensive national ads for business and culture sections of the paper.

“You may have seen our national edition gain in heft this year,” said Times President Janet Robinson. “The reason is that we went to our business advertisers and our cultural advertisers and we asked them to run nationally as opposed to just in the [local area]. We did not hear a whimper.”

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If advertisers didn’t whimper, some readers of the new Northeast edition did.

The Northeast edition launched in February is the Times’ effort to add readers in the region between Maine and Virginia. Instead of a five- or six-section New York metro paper or the slim three-section national edition, these new papers for the Northeast are between the two with four daily sections.

In Boston or Washington, the Times now features zoned TV listings and weather, a local arts date book and late-breaking news. What’s missing is local New York--the school board fights, the movie listings, the newest and best deli in Manhattan.

Some readers are complaining that they were getting “a road-company knock-off of the New York Times,” as Boston talk-show host Christopher Lydon described the opposition to the new paper.

But Sulzberger says the new edition has added 6,000 daily subscribers to the 34,000 in Boston. Moreover, other Times readers have marveled that the Northeast edition sometimes carries later news than the local paper. Morton, who lives just outside Washington, said that the morning after the Oscars, the Times had the complete list. His Washington Post that day did not.

If it still seems like a lottery for Sulzberger and company, expanding the paper during its rockier periods is a family tradition. In 1896, Sulzberger’s great grandfather, Adolph S. Ochs, paid $75,000 for a nearly bankrupt New York Times. Ochs vowed to make the paper the best of many in New York City. He added staff, created the Book Review and Sunday magazine and gained readers steadily until circulation at his death in 1935 was 465,000.

Similarly, in the 1970s, as many news organizations were starting to shorten stories and cut back on news space, Sulzberger’s father, as publisher, expanded the paper to four sections. Then-Executive Editor A.M. Rosenthal said, “We added more tomatoes to the soup and less water.”

Now, it is Sulzberger Jr.’s turn in the kitchen.

“Every generation gets a chance to make a difference in this place,” Sulzberger said as he walked briskly through a new beige-and-white newsroom that betrays little of the grime and clutter of earlier years. “This is mine.”

So far, New York’s financial analysts have put their stamp of approval on Sulzberger’s strategy for the Times as well as the health of the $2.6-billion publishing empire that includes 23 newspapers, nine magazines and 10 broadcasting operations. The stock is up during the past 12 months, from a low of $28 3/4 to $49 at Friday’s market close.

Analysts who like the stock cite the company’s national strategy, the addition of sections to the New York edition and the possibility of “one, perhaps two large acquisitions” in the near future, as Russell T. Lewis, president and CEO of the New York Times Co., hinted to analysts on Tuesday.

Money magazine picked the New York Times Co. as a stock of the month in June, noting, in part, that a $20-million effort by the newspaper to boost circulation outside New York City could increase the paper’s national circulation by 40% during the next five years.

“What I think that [the analysts] are seeing is a long-term package,” Sulzberger said recently as he promoted his company in his modest Times Square office. “It’s not just the ability to leverage a single year, a single quarter, to higher profitability. Anybody can do that. Not anyone can sustain it, but anyone can do it, for a quarter or two at least.”

But for all the backing of Wall Street and the agreement of more than 38 newspapers to help with delivery of the Times nationally, news analysts are concerned about what a bigger and even more dominant New York Times would do to other newspapers around the country.

The answer that Sulzberger and others at the paper offer is that they would not compete with local papers for local news. And they suggest that many mid-sized or smaller papers have already decided that national and international news is too expensive or too boring for their readers.

“I don’t think you could blame us for making local papers more parochial,” Lelyveld said. “The most you could say is that in a number of communities the local papers have made it easy for us to get our small foothold.

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Lelyveld cited one Midwestern editor who got a call from the corporate headquarters complaining that there was too much foreign news on the front page.

“Where that is happening, people are eventually going to feel undernourished,” said Lelyveld, who believes that many will then start reaching for more “‘ambitious national publications,” including the New York Times.

Still, these readers probably won’t drop the local paper even if they begin getting home delivery of the Times, Sulzberger says. For one thing, in many areas, the local paper will be delivering the Times.

“There are a whole variety of things that people are going to continue to need” that they won’t get in the New York Times, says Sulzberger, including news about the mayor and the school board as well as the local TV listings and the specials at the supermarket.

But what about newspapers that still also spend the extra money and time to cover national and international news--like the Boston Globe, which is owned by the New York Times Co.?

“It’s like a mother hen squashing its well-known adopted egg,” said James C. Thomson Jr., professor emeritus of history and journalism at Boston University and former curator of the Nieman Foundation for Journalism at Harvard University. “It will make the Globe more parochial--almost inevitably.”

Sulzberger denied that the New England push would hurt the Globe and said the company still “wants the Globe to be as great as it can be.” Globe editor Matthew Storin also said that no changes were planned for his newspaper as a result of the Times’ new edition. But he said that the Globe, like other newspapers around the country, experienced a decline in circulation recently and would be focusing on new ways to boost readership in the Boston area.

Other newspaper executives suggested that they saw no problem delivering both their local paper and the New York Times.

“You have to ask yourself whether it will make a real difference in your competitive situation if you deliver them or not,” said Jack Fuller, president of the publishing division of the Chicago Tribune Co., which delivers and prints the Times in the Chicago area.

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The Times has been selling slightly more than 20,000 copies every weekday in the Chicago area, according to the Audit Bureau of Circulations’ latest figures. The Tribune’s circulation is about 665,000.

“We concluded there wasn’t a whole lot of downside to it” Fuller said. “I guess someday there is always the possibility of erosion, but that’s true whether you deliver them or not.”

For all their help from other publishers, the Times is not operating in an empty national arena. Besides news magazines and television news from the likes of CNN and MSNBC, there are two national newspapers also competing for readers--the Wall Street Journal and USA Today.

“We are now seeing three different national newspapers, three different kinds of content, three different editorial points of view, three different audiences--over about 80% of the country,” said Thomas Curley, publisher of USA Today. “And basically, I think we are healthier for that.”

USA Today has 1.7 million readers nationally and the Wall Street Journal goes to 1.8 million people, a little more than 110,000 of them in New York City.

But if the Journal focuses on business and USA Today appeals to travelers and people in a hurry, Curley says he believes that the Times has not yet focused on what they want their national edition to be.

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“The fundamental question is: Are they a national paper or are they a New York paper?” Curley asked.

It’s a good question, and Times executives clearly would like to say, “Both.”

The Times’ annual report pitches the paper as a national force, noting that the new Queens plant “will give the paper a stronger national presence and assure more revenue into the 21st century. “

At the same time, Lelyveld offers assurances in an interview that the Times will always be a New York paper, not a national paper like the Times of London or Le Monde in Paris.

“I don’t think we’ll ever detach ourselves very much from New York City,” Lelyveld said.

“We haven’t yet written anything especially for the national edition or for the Northeast edition,” he added, explaining that he is busy focusing on the details of moving his news deadlines from 9:30 p.m. to almost midnight in the next few weeks. “But I don’t say it will never happen.”