Ad Revenue Eludes Newspapers (Dinosaur Media DeathWatch™)

The Wall Street Journal ^ | November 4, 2009 | Nat Worden

[abb]

Newspaper publishers are running out of costs to cut, and they need to show some real ad-revenue gains soon.

Executives from major publishing chains have clung to a slight moderation in their ad revenue's year-over-year rate of decline from quarter to quarter this year as a sign of improvement.

But that probably has more to do with the mathematics of easing comparisons to last year's economic decline than it does with any actual improvements in this year's ad performance.

The reality is that newspapers are suffering severe declines in ad revenue this year on top of the double-digit percentage declines they suffered last year.

Compared with the first half of 2009, their recent performance doesn't appear to be getting much worse, but it has yet to show any real recovery.

[NEWSPAPERS0903P]

Click for interactive map of pressures facing the newspaper industry.

As newspapers continue to lose business to digital ad rivals, betting on whatever rebound remains for newspapers is a long shot for investors, given the myriad of issues facing the industry.

If newspapers don't see a print advertising pickup in the fourth quarter, Wachovia analyst John Janedis said "it's increasingly likely that expense cuts, while significant, won't be enough to drive upside to earnings."

Mr. Janedis said he sees newspaper earnings estimates moving lower next year. He forecasts that Gannett Co. , publisher of USA Today, will see its newspaper ad revenue drop an additional 14% in 2010 after a 30% decline this year.

In recent quarters, many publishers have soothed near-term credit concerns and largely outperformed expectations on Wall Street by boosting their profits with aggressive cost-cutting measures, like layoffs and pay cuts.

snip

[abb]

Wednesday morning good news.

[abb]

ping

[Mr. K]

Is there ANY conservative newspapers?

and how are they doing by comparison?

[abb]

http://online.wsj.com/article/SB10001424052748704013004574515091329385108.html
Time Warner Profit Falls 38%

http://www.boston.com/ae/media/articles/2009/11/04/net_revolution___and_rerun/
Net revolution - and rerun

http://gawker.com/5396209/the-spitzer-files-how-the-new-york-times-coddled-client-no-9
The Spitzer Files: How the New York Times and the Press Serviced Client No. 9

http://online.wsj.com/article/SB10001424052748703294004574514140239380158.html
Bloomberg LP Considers Charging for Certain Material on Web Site

[abb]

Except for the Washington Times, I can think of none. And they aren’t doing well either.

[Interesting Times]

Except for the Washington Times, I can think of none. And they aren’t doing well either.

The WaTimes is considerably less conservative than a couple of years ago. There was a fawning tribute to Cornell West the other day in the "Religion" section.

[abb]

http://www.editorsweblog.org/newspaper/2009/11/double_threat_to_quality_journalism_tigh.php
Double threat to quality journalism: Tighter deadlines, fewer copy editors

http://www.observer.com/2009/media/selling-magazines-piece-piece
Selling Magazines, Piece by Piece

http://mediadecoder.blogs.nytimes.com/2009/11/03/time-inc-layoffs-begin-at-sports-illustrated/
Time Inc. Layoffs Begin at Sports Illustrated

http://phoenix.bizjournals.com/phoenix/stories/2009/11/02/daily22.html
‘Republic’ may not benefit from demise of ‘Tribune’

http://www.chicagotribune.com/business/sns-ap-us-earns-time-warner,0,3761224.story
Time Warner posts lower 3Q profit

[martin_fierro]

Is there ANY conservative newspapers?

• Pittsburgh Tribune Review
• Jacksonville FL's Times-Union
• San Diego Union-Tribune
  

and how are they doing by comparison?

Dunno.

[abb]

http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1004032924
Canada’s Largest Paper Launches Biggest Re-Structuring Ever, Buyouts

http://www.weeklystandard.com/Content/Public/Articles/000/000/017/162ttlen.asp
The Washington Post Loses in Virginia
How their effort to beat McDonnell backfired.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ampyPR1YLQ8s
Vivendi Says It’s in ‘No Hurry’ to Sell NBC Stake

http://blog.nielsen.com/nielsenwire/media_entertainment/within-ad-supported-media-broadcast-radio-reach-is-second-only-to-live-television-study-finds/
Within Ad Supported Media, Broadcast Radio Reach is Second Only to Live Television, Study Finds

[Obadiah]

Here's are some ideas for America's newspapers:

1) Stop the liberal activism in reporting.

2) Stop treating every conservative as an infectious entity.

3) Stop cherry-picking stories to support the latest liberal meme.

4) Stop treating Obama and his liberal entourage as the second coming.

Naaaah.... They'll just go down with the ship and blame it on the Internet.

Honestly, I would re-subscribe to my local daily paper, but there is no way I am going to support a paper that tells me every day on the front page that I am a repulsive idiot.

[Frantzie]

They can all go to h*ll. I cancelled everything. I do love Investors Business Daily but I am not a subscriber. Great newspaper and conservative editorials. I had WSJ but it is too lib now.

I have no mags except NRA magazine and industry journals.

The cable TV goes this week too. They backed Obama and they are not getting any money from me.

[abb]

Morris Publishing which owns the Jacksonville paper is on the edge of bankruptcy.

http://atlanta.bizjournals.com/atlanta/stories/2009/09/28/daily22.html

The San Diego paper was sold last May and is cutting jobs with both hands.

http://blog.taragana.com/n/san-diego-union-tribune-to-ax-112-jobs-in-latest-round-of-cuts-since-new-ownership-138196/

The Pittsburgh TR is owned by Scaife, and he’s got deep pockets. But their circulation continues to decline.

[Frantzie]

Investors Business Daily.

[The Enlightener]

Honestly, I would re-subscribe to my local daily paper, but there is no way I am going to support a paper that tells me every day on the front page that I am a repulsive idiot.

The maddening thing to me, besides the name calling, is the lack of actual facts. They'll report a story where the liberal says the sky is green and the conservative says the sky is blue, then they'll spend ten paragraphs debating the positions as if they are completely equal without doing a 5 second google search to find out if one opinion is more likely than the other. Then all through the conservative part of the story they'll imply that conservatives are just bone headed idiots and everyone agrees with the liberal, so we should just accept the liberal opinion as the more likely to be correct. And they expect me to pay for such stories. I don't think so.

[bilhosty]

The Tribune Review is losing money and is kept open only by Richard Mellon SCaife’s bank account. The Jacksonville News paper is owned by Morris Publishing which is in Bankruptcy . The San Diego paper has been sold and no one knows what is happening to it. But here is also Rupert Murdoch's NY Post which is losing big ciruclation.

[abb]

http://cancelthebee.blogspot.com/
Fresno Bee to lay off 51 employees in circulation department

[GI Joe Fan]

"Is there ANY conservative newspapers?"

The NY Post and a handful of other papers are still out there, but the vast majority of papers these days are clones of the North Korean media machine.

"and how are they doing by comparison?"

Not too sure on this one, but I think the NY Post is doing well these days. It certainly is doing better than the NY Times.

[abb]

As much as anyone on FRee Republic, I detest liberal newspapers - NY Times, LA Times, SF Chronicle, etc. But I cannot find any empirical data which show that conservative-leaning newspapers are holding up any better than any other.

It is, in my opinion, a technology driven event that is causing the demise of ink-on-paper information distribution systems.

[abb]

Not too sure on this one, but I think the NY Post is doing well these days. It certainly is doing better than the NY Times.

The NY Post hasn't turned a profit in ages. It is being subsidized by Murdoch.

http://www.businessweek.com/magazine/content/05_08/b3921114_mz016.htm

[Landru]

"Wednesday morning good news."

Yes, it certainly is.
Say, this "morning good news" thing, it's getting to be a routine I can live with abb. LOL!!
Now then...

"Newspaper publishers are running out of costs to cut, and they need to show some real ad-revenue gains soon...If newspapers don't see a print advertising pickup in the fourth quarter, Wachovia analyst John Janedis said 'it's increasingly likely that expense cuts, while significant, won't be enough to drive upside to earnings.'"

There is one last thing they can cut: Their wrists.
Just make darned sure all *participants* have Key Man policies & voila'. Fixed.
Such a sleazy stunt's well within rag leadership's expertise' today; so, don't rule the idea altogether out quite yet, *fellas*. LOL!!

"But that probably has more to do with the mathematics of easing comparisons to last year's economic decline than it does with any actual improvements in this year's ad performance...The reality is that newspapers are suffering severe declines in ad revenue this year on top of the double-digit percentage declines they suffered last year."

Yea, high level mathematics here alright.
Can't be "related to" circulation not being just down.
Circ numbers are plain ol' outa here, off the X axis in the 3rd quadrant somewhere under the floor. LOL

"As newspapers continue to lose business to digital ad rivals, betting on whatever rebound remains for newspapers is a long shot for investors, given the myriad of issues facing the industry."

Whose betting?
We got Time, are very patient, can wait for the inevitable.
And man the inevitable is the real sure bet. LOL!!

[Obadiah]

I agree somewhat with your post, but I would say that the die has been cast with respect to newspapers. Had they not sold their integrity to liberals they may likely not be in the jam they are in. Surveys are now consistently demonstrating that the public does not trust journalists. They sold out. They sold their most valuable commodity.

Corporations spend billions of dollars cultivating and polishing their brand image for a reason. Newspaper’s brand image is one of liberal bias, and people of all stripe know this and have abandoned them.

Look at CNN. When people began to grasp that it was the Clinton News Network and now the Obama cheer leading squad, CNN’s rating tanked. FOX cleaned up. Whether people admit it or not, they want to honestly hear both sides of the story.

There is a very, very good reason FOX News keeps repeating the mantras, Fair & Balanced” and “We Report, You Decide”. These are not mere slogans, these go to the very core of what people want in a news organization - newspapers, TV news, etc. Newspapers chose to abandon this principle, and in fact, now (just below the threshold) they flaunt that they are biased liberals.

Bottom line? The newspaper brand is dead via suicide.

[Tribune7]

But I cannot find any empirical data which show that conservative-leaning newspapers are holding up any better than any other.

The only conservative big ones I can think of are the NY Post and the Wall Street Journal. I don't know that I'd call IBD or the Washington Times "big ones". Anyway, the Times is perceived as a Moonie paper and I don't think it ever made money.

The WSJ, of course, is now number one and actually saw a circ increase, IIRC.

The Post of course is hurting like everyone else.

It's not so much a matter of ideology as much as honesty and the ability to provide useful information.

[Tribune7]

Oh yeah the Tribune Review.

Its circ is skyrocketing and it has passed the liberal Pittsburgh Post-Gazette whose circ is going in the other direction.

[abb]

Very true. It is a stupid business decision to alienate half your customer base when marketing your product. It is called (can’t remember the FReeper who coined the term) “The Dixie Chicks Marketing Strategy.”

But realize what makes these hard-core newsies tick. They think they are God when it comes to saying what is and isn’t news. They were raised from a pup to think that way. Taught in schools. Their professional peer groups reinforced that world view.

But in reality all they ever had was a near-monopoly in distribution. The internet killed it all.

[abb]

Good find on the TR. A very rare paper indeed that is increasing its circulation. I wonder if earnings are increasing? Sometimes, circulation is a result of promotions, free distribution, etc.

Used to newspapers had net profit margins of 20 to 30 percent. Those days are gone forever.

[abb]

http://www.marketwatch.com/story/will-time-warner-scrap-time-inc-2009-11-04?siteid=nbih
Will Time Warner scrap Time Inc.?
Commentary: Its history would be changed forever

http://gawker.com/5396912/time-staffers-have-two-weeks-to-volunteer-for-a-dozen-buyout-packages
Time Staffers Have Two Weeks to Volunteer for a Dozen Buyout Packages

[Tribune7]

I wonder if earnings are increasing? Sometimes, circulation is a result of promotions, free distribution, etc.

Good question. And often -- or once upon a time when it didn't correlate with a drop in advertising -- a drop in circ meant big increases in profits -- a lot less expense and almost the same amount of revenue.

[GI Joe Fan]

Thank you.

I didn't know that.

Their headlines are awesome sometimes.

Remember this cover from the day our Troops waxed Zarqawi?

[Liberty Valance]

[ConservativeMind]

“But I cannot find any empirical data which show that conservative-leaning newspapers are holding up any better than any other.”

I beg to differ with your words, abb.

The Wall Street Journal and Investors Business Daily both seem to be less affected than the average of all liberal newspapers.

Part of that might be that neither uses much AP, Reuters, or AFP content. It might also be from their targeting of content that cannot be easily found elsewhere and which therefore has added value. If so, then a conservative work ethic and a practical targeting of the market are the reason for their better results.

The New York Times can claim a similar amount of in-house work as the WSJ and IBD, but that icon of liberalism has such a poor financial future that they took out a 14% loan with a loanshark from Mexico and have had their stock bottom out at almost 1/10 of its value just five years ago.

There is a shift to electronic distribution of news, but all of the papers near bankruptcy run a large amount of liberal-authored AP content, including the “conservative” papers near death.

[abb]

The Wall Street Journal and Dow Jones (I used to be a stockholder in DJ, so I kept up with it) is not making much money, if at all. I owned the stock for over 15 years, and sold it (when Rupert bought the company) for not a lot more than I paid for it. Since that transaction, DJ’s earnings (or losses) have been hidden within Rupert’s other newspaper group. I am still an online subscriber to the WSJ.

But the chatter in the industry is that the WSJ is suffering along with everyone else. Layoffs, cutbacks, shrinking ad pages, etc. The consensus is if Rupert had to spin off Dow Jones today, he would have to sell it for a whole lot less than he paid for it.

As for IBD, I can’t speak to whether it makes money or not.

[abb]

http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1004033067
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http://www.politico.com/news/stories/1109/29129.html
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http://www.eastvalleytribune.com/story/146624
Sense of loss for integral part of community

http://mediadecoder.blogs.nytimes.com/2009/11/04/time-inc-files-to-cut-280-jobs-in-new-york/
Time Inc. Files to Cut 280 Jobs in New York

http://www.dailyfinance.com/2009/11/04/time-inc-shuts-down-fortune-small-business-magazine/
Time Inc. shuts down Fortune Small Business magazine

http://blogs.wweek.com/news/2009/11/04/oregonian-editor-tells-staff-it-appears-layoffs-are-inevitable/
Oregonian Editor Tells Staff It Appears Layoffs Are “Inevitable”

http://gawker.com/5397105/time-inc-layoffs-hit-people-essence
Time Inc. Layoffs Hit People, Essence

[abb]

http://www.mediaite.com/tv/cnn-closes-out-october-off-the-list-of-top-30-cable-channels/
CNN Closes Out October…Off The List Of Top 30 Cable Channels

http://online.wsj.com/public/resources/documents/NEWSPAPERS0903.html
Pressure on the Presses

[abb]

News Corp. (NWS) just released their quarterly earnings. This is pertinent to our earlier discussion. NWS does not segregate earnings by newspaper division, but aggregate it into one segment.

http://finance.yahoo.com/news/News-Corporation-Reports-bw-3760478619.html?x=0&.v=1

“The Newspapers and Information Services segment reported first quarter operating income of $25 million, a decrease of $109 million compared with the same period a year ago. The decline was driven by lower advertising revenues, partially offset by lower operating expenses.”

snip

“Dow Jones’ first quarter operating results declined from the same period a year ago, due to lower advertising revenue at The Wall Street Journal and lower information services revenue. These declines were partially offset by reduced operating expenses and increased circulation revenues which were driven by price increases at The Wall Street Journal. The Wall Street Journal now has the largest circulation of any newspaper in the U.S.”

As the segment is made up of many newspapers, it seems likely that none of them are doing too well. Here is what makes up the segment.

http://www.newscorp.com/operations/newspapers.html

[abb]

http://www.foliomag.com/2009/after-four-print-issues-purpose-driven-connection-go-online-only
After Four Print Issues, Purpose Driven Connection to Go Online-Only

http://www.theroot.com/views/death-newsroom-swagger
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[abb]

http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1004033403
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[abb]

http://www.niemanlab.org/2009/11/google-ceo-eric-schmidt-envisions-the-news-consumer-of-the-future/
Google CEO Eric Schmidt envisions the news consumer of the future

[TenthAmendmentChampion]

The Wall Street Journal editorial page is pretty conservative; the news therein is slightly left. It’s a pretty readable paper, and the circulation is growing. The Orange County Register and the South Bay Daily Breeze are still going and are both centrist if not slightly conservative. There are some papers in the Inland Empire (Ontario/Riverside) areas that lean conservative. Also the Bakersfield Californian is not too bad.

You’d think the Central Valley of California would have conservative papers, but the McClatchy Bee chain (Modesto, Sacramento and Fresno) are all leftist rags. The sooner they die, the better.