News roundup: Signs of industry recovery

Posted by Nestor Bailly on October 19, 2009 at 2:46 PM

There has been quite a bit of recent news about closures, cutbacks, reduced ad revenue and the like so perhaps it is time for des bonnes nouvelles:

First, from the floors of various exchanges we see signs of industry optimism. The Daily Mail & General Trust, the Trinity Mirror and Independent News and Media have all seen their shares increase significantly after bottoming out earlier this year.

Just like the US megabanks of recent news, it is expected that various publishers will report better than expected revenue for the third quarter. This of course is due to massive job cuts and expense decreases.

The mood of optimism is also reflected in the actions of news publishers themselves, with the New York Times (whose stock rose 18% since the beginning of 2009) opting to keep the Boston Globe and the creation of McCann Erickson, an advertising organization opened by the Newspaper Marketing Agency.

McCann's London CEO Chris McDonald is upbeat about the future for print advertising vs digital media. "Newspapers reach 23 million people over a 24-hour period and consumers spend about 40 minutes engaged with those papers...Put forward that sort of data and marketing directors begin to think about their reach and frequency targets. Then you talk about how a newspaper is in your hands, you have a relationship with it and it's an immersive experience - so the advertising has more of an effect than sitting in front of a television doing other things. This is a logical approach to what gives newspapers such value for marketeers."

NMA research has shown that newspapers are increasing their share in sectors of the ad market that have been successful for them in the past, such as retail, food, clothing and drinks. However for computers and luxury goods newspapers have seen a decrease in adverts. But the message remains that print advertising has a future.

Meanwhile the McClatchy Company reports some good news at its Q3 2009 earnings call. Revenue in general was down, but the company shows financial progress and ability to weather the recession. Advertising revenue was down 28.1% but circulation revue increased 6.7%. In general print advertising decreases were offset by digital and online advertising gains, in line with industry trends.

Government aid remains a tricky issue in the US, where many publishers are opposed to it because of fears of regulation. However, it could very well be necessary to bring about the changes necessary to keep traditional news sources relevant. As the NYT says, "All we have to do is get the government to open the kimono on databases, foundations to rethink their priorities, universities to become newsrooms, rewire the federal tax code, get public broadcasting overlords to think local, and commercial broadcasters to kick in money for the public good, and we will have a dependable news infrastructure for a new, more complicated age."

Sources: MediaGuardian blog

Seeking Alpha

The Independent

New York Times