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File photo of Arthur Sulzberger Jr., the chairman and publisher of The New York Times Company.

Mark Lennihan/AP

The New York Times Co. continues to see strong subscriber growth thanks to its much-lauded paywall, but advertising in both the printed paper and its websites pulled back in the last quarter as the economy sputtered and advertisers turned to digital alternatives.

The company said it now has 566,000 subscribers to its digital paywall, a gain of 11 per cent from the last quarter, which it installed last year in an attempt to offset the loss of advertising plaguing the newspaper industry. But print advertising fell 10.9 per cent and digital sales decreased 2.2 per cent "largely due to the challenging economic environment, continuing secular trends and an increasingly complex and fragmented digital advertising marketplace.

The Times put up its metered paywall last March, and has seen steady growth in subscriber rates. Its success has emboldened publishers around the world to do the same – including The Globe and Mail which launched its own metered paywall on Monday.

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But it still faces pressure from a weak advertising market, posting a $2.2-million profit in its third quarter compared to $15.6-million a year ago. Revenue decreased 0.6 per cent to $449-million, compared to $451-million a year ago.

"While our results for the third quarter reflect continued pressure on advertising revenues, total circulation revenues rose led by the ongoing expansion of our digital subscription base," chief executive officer Arthur Sulzberger, Jr. said in a statement.

Canada's Postmedia Network, which owns such titles as the National Post and Ottawa Citizen, is also experimenting with paywalls, and posted a $28-million loss in its fourth quarter. Chief executive officer Paul Godfrey has vowed to strip $120-million in expenses from the company over the next three years to pay debt and streamline the publisher's operations.

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