The New York Times has lost almost 20% of its circulation in New York City between 2001 and 2004, its competitor, The New York Post reports. And the Post gleefully notes that its own circulation in NYC has soared 29% in the same period. So comparing the papers' circulation in New York City today, the Post sells 371,341 copies to the Times' 260,526.

Forty—two percent greater local circulation for the Post is impressive, to say the least.

But the situation is more complex than the numbers alone indicate. The Times has, in essence, decided to become a national publication for the slice of the population who have become known as blue state voters. It raised its cover price (while the Post lowered its own) in New York, and has opened a wave of remote printng facilities in cities across the country. It is targeting national advertisers, and giving an ever—worsening deal to local New York City advertisers. The Post notes that for NYC local advertisers, the Times costs 30% more for 20% fewer readers than in 2001.

By entering more and more national markets, the Times has managed to hold its own in overall circulation. But there are some indications that the law of diminishing returns has been reached, with few or no more new markets to enter, and possibly declining circulation in the national markets as well. My friend Jack Risko of Dinocrat.com is undertaking the complex detailed research to gather the data to test out these questions, and I can hardly wait to see his results. Jack is a student of business history and theory, having studied with Alfred D. Chandler, the founder of the scholarly discipline of business history, our mutual teacher. He is also an experienced venture capitalist and turnaround artist, in other words, a man who knows how to read between the lines of financial statements, SEC filings, and market data, with the perspective to see where things are heading.

For its shareholders, the past year has been a disaster for the New York Times Company. There may well be planted the seeds for even worse results ahead. The utlimate symbol of mainstream media power faces a possible vortex. This is one story where bloggers are well in the lead, symbolizing a change in the very structure of mass media. Stay tuned.

Hat tip: Jack Kemp

Thomas Lifson  1 11 06