While digital subscribers to pay wall leader The New York Times have increased considerably in the past quarter, its digital ad revenues are on the slide.

Reporting that digital ad revenue declined 2.3% at the division housing The New York Times and the Boston Globe, The Wall revealed that the slip came despite an impressive 16% increase in subscriber numbers between the last quarter of 2011 and the current period.

Paid subscriptions to The New York Times and the International Herald Tribune hit approximately 454,000 as of March 18, according to the report.

Overall The New York Times Company recorded an operating profit of US$19.6 million in the first quarter of 2012 compared with US$25.9 million in the same period of 2011.

Chairman and chief executive officer of the Times group, Arthur Sulzberger Jr., attributed the increase in total company circulation revenues to the growth at its flagship masthead. “We expanded our digital subscription base and further developed a robust consumer revenue stream as demonstrated by the 10 percent increase in total company circulation revenues, led by the 13 percent growth at The New York Times Media Group,” he said.

He reaffirmed belief in the pay wall model, saying the company’s digital strategy “has provided a successful model for the industry” and that “readers have embraced digital subscriptions and we expect to build on this strong start as we embark on our second year of digital paid subscriptions.”

Commenting on ad revenue performance, Sulzberger cited the US economy as a complicating factor, “The uneven US economic environment and uncertain global conditions continued to present challenges to the advertising marketplace. Print advertising revenue trends were similar to those in the fourth quarter of 2011, while digital advertising revenues at the News Media Group were under pressure in the first two months of the year, resulting in a decline of 2% for the first quarter.”