Quarter 3 shows big decline for US newspapers
Posted by Evan Fell on November 22, 2007 at 11:58 AM
The results of the 3rd quarter show that the decline of print is accelerating and online growth is decelerating and not making up for losses in print.
Print revenues were down 9% to $10.1 billion. Online grew 21% to $773 million. Last year in Q3 online growth was 25.3% which proves online growth is slowing at the same time, advertising losses are getting bigger and bigger in print.
October results from groups Gannett and McClatchy showed revenue losses for the month, with McClatchy reporting online revenue down 4.1%.
So there is less money coming in from the print side and some extra revenue coming from online, but this overall still produces a decline in revenue.
However, there are newspaper companies who have found success in these troubled times. The reason for this: they have diversified.
The Washington Post Company, for example, reported revenue from its education division grew by 22% meaning the Kaplan business is now bringing in 50.3% of the company’s total revenue and that figure is sure to grow as print, TV and magazines continue to decline.
In the UK, Daily Mail and General Trust (DMGT) announced advertising increases for its print and digital operations. However the real income came from the company’s Business-to-Business division, which is involved in many non-newspaper ventures, and much of which is located in the US.
Newspaper broker Larry Grimes, who specializes in the weekly markets, says in his Newspaper Industry Report “If you are the owner of a market leading weekly newspaper we still believe this is an optimum time to sell,” claiming that buyer demand for good weeklies is still strong.
Grimes also says that small and midsize newspapers are still in demand. At least papers with strong print and online versions that own their market. He does however admit that prices are falling to around ten times cash flow.
Grimes gives the following advice to newspapers, “The most attractive papers (the papers that are attracting top dollar) are those which are taking a pro-active approach to their market. They continue to increase their household penetration. They are creating special sections, products and on-line resources that reach out to all major segments of their population (that includes the 21-35 demographic.) They are getting to better know their advertiser’s business and are working with them to create marketing campaigns that generate a strong ROI.”
Grimes is hoping, however, that gasoline prices do not go any higher, because in that case, by trickle effect, there will be less of a media spend and that “yes, a slow retail environment will lead to a slowdown in ad spending.”
However Grimes does say there is good news: “Local advertisers may really take a hard look at where they are getting the best value for their dollar. And they may well find newspapers are at the top of their list.”
Source : Follow the Media
October results from groups Gannett and McClatchy showed revenue losses for the month, with McClatchy reporting online revenue down 4.1%.
So there is less money coming in from the print side and some extra revenue coming from online, but this overall still produces a decline in revenue.
However, there are newspaper companies who have found success in these troubled times. The reason for this: they have diversified.
The Washington Post Company, for example, reported revenue from its education division grew by 22% meaning the Kaplan business is now bringing in 50.3% of the company’s total revenue and that figure is sure to grow as print, TV and magazines continue to decline.
In the UK, Daily Mail and General Trust (DMGT) announced advertising increases for its print and digital operations. However the real income came from the company’s Business-to-Business division, which is involved in many non-newspaper ventures, and much of which is located in the US.
Newspaper broker Larry Grimes, who specializes in the weekly markets, says in his Newspaper Industry Report “If you are the owner of a market leading weekly newspaper we still believe this is an optimum time to sell,” claiming that buyer demand for good weeklies is still strong.
Grimes also says that small and midsize newspapers are still in demand. At least papers with strong print and online versions that own their market. He does however admit that prices are falling to around ten times cash flow.
Grimes gives the following advice to newspapers, “The most attractive papers (the papers that are attracting top dollar) are those which are taking a pro-active approach to their market. They continue to increase their household penetration. They are creating special sections, products and on-line resources that reach out to all major segments of their population (that includes the 21-35 demographic.) They are getting to better know their advertiser’s business and are working with them to create marketing campaigns that generate a strong ROI.”
Grimes is hoping, however, that gasoline prices do not go any higher, because in that case, by trickle effect, there will be less of a media spend and that “yes, a slow retail environment will lead to a slowdown in ad spending.”
However Grimes does say there is good news: “Local advertisers may really take a hard look at where they are getting the best value for their dollar. And they may well find newspapers are at the top of their list.”
Source : Follow the Media
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