The New York Times (NYSE: NYT) is particularly proud of one circulation statistic: 73 percent of its home-delivery subscribers have been on board for at least two years. That core—“the barometer of the health of the Times,” NYT President and GM Scott Heekin-Canedy calls it —has grown steadily since the early 1990s to 822,000 now, up from 600,000 in 2000. Heekin-Canedy and others believe one way to keep it healthy during the newspaper equivalent of the flu epidemic is make the print edition more valuable to those subscribers and possibly convert some single-copy buyers. That’s the circulation-driven rationale for the Bay Area Report launching Friday and the planned Chicago version, as Heekin-Canedy explained during an interview with paidContent: “In a sense, we’re testing the market to prove that belief.”

He views the regional focus as a service. “In doing this, we have reason to believe that it will strengthen our subscriber retention, perhaps result in a little bit of circulation growth, but we don’t have big ambitions there.” That’s realistic given that four pages a week of added regional coverage isn’t a game changer. Or, as Heekin-Canedy admits, “by itself, it’s not going to be a reason to purchase the Times or subscribe to the Times.” Still, the marketing flyer I saw for the Bay Area Report pushes trials for the Weekender edition—Friday-Sunday at half-price: $5.50 a week for 12 weeks ($66). By comparison, the San Francisco Chronicle‘s weekend subscription runs $4.50 plus a $15 Safeway card.

Heekin-Canedy is keenly aware that some people see this as competition for already faltering area papers like the Chronicle. “As you might expect, we’re very sensitive to that consideration. In our view, historically all of the evidence shows we’re a supplement to, not a substitute for, the local paper.” The pages being added “hardly could be viewed as a substitute for a local journalism product.” He’s not sure how many households get the Times and the local metro paper, but says the company’s research over the years shows that predominantly it’s perceived as a second buy. “We have no reason to believe that’s changing now.” But he acknowledges that the changes at local metros make this a good time to launch an effort that might help the Times stand out.

Why Bay Area?: Heekin-Canedy says the idea of adding coverage to various editions has been around for a long time but it wasn’t until late spring that the timing and opportunity matched. San Francisco was a natural starting point. The Times sells more papers there than anywhere else outside the Northeast; 40,080 copies daily and 57,514 on Sundays. It also has a 10-person news bureau. “That was helpful with regard to the timetable we had in mind for launching. We have the newsroom staff resources in the Bay Area to jumpstart this.”

Advertising: Heekin-Canedy won’t say how much it costs to produce a page of the Times (and I haven’t found a good number on my own yet) but they think they can support the expansion costs through local ad sales. “Part of what we’ll be evaluating is our ability to sell advertising into the pages.”

Partners: The Bay Area Report will be more the exception than the rule as the NYT expands news coverage in various regions. Heekin-Canedy told me, “Our preference is to find a local partner to produce this. This doesn’t really fit within our staffing model, our staffing resources for the New York Times newsroom.”  San Francisco will be a kind of hybrid. “We expect in the not-distant future to be working with a partner to provide the content.” Heekin-Canedy avoided committing to the nonprofit Bay Area project being started by the University of California-Berkeley and KQED with funding from Warren Hellman, a partnership that was being discussed as all but certain when I was in Sam Francisco earlier this month. “We’re in discussions with a number of people in the Bay Area. We’re not at the stage where we’re willing to make commitments.” Some people I spoke with privately raised qualms about the Times relying on student copy. Heekin-Canedy said, “We’re open to the approach but it’s part of the decisions we’ll have to make when we’re ready to make the commitment.” The editorial side will judge the service providers for quality and integrity.

The model being explored for Chicago is analogous to a licensing deal from a wire service but not completely. For instance, co-branding the pages is part of the discussion. “We haven’t made decisions yet on that, but it’s definitely a possibility.” As for possible partners, I asked if they were interested in working with the major dailies or more regional players. The reply: “It’s probably premature. I expect that we’ll be making an announcement in the not too distant future.”

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