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I’m just catching up to a report this morning from Citigroup’s William Bird in which he downgraded New York Times (NYSE:NYT) shares to Sell from Hold.

He makes many of the same points that other skeptics of the newspaper sector have made in recent months: the steady shift of classified ads to the Internet at a time when readers are abandoning newsprint in favor of the Web. And here’s the stat that got my attention: from 2000 to 2005, about 18% of all U.S. broadband households dropped their newspaper subscription. By 2010, 35% of all households will have dropped their subscriptions, he asserts.

Concludes Bird: “the pace of Internet substitution is accelerating so fast, it’s overwhelming two positive undelrying trends: older demographics and slowing broadband adoption.”

For the newspaper industry, that is a worrisome situation, indeed.

In Tuesday’s session, New York Times shares fell 69 cents to $23.21.

Source: Citi: New York Times Headed Downhill Due To Internet