By paulgillin | March 7, 2008 - 4:31 pm - Posted in NewMedia, Newspapers

Drumbeat of terrible earnings news continues

As if the newspaper industry needs any more bad news, a new survey finds that high-margin print classified ads perform dismally compared to online competition. The only exception: recruiting blue-collar workers. Quoting:

‘A survey of human resource executives revealed that print ranked the lowest when it comes time to finding good candidates. ‘Statistically and anecdotally,’ editors with Classified Intelligence wrote, ‘print advertising is an ineffective medium for recruiting candidates.’ Seventy percent of respondents said print was either ‘very ineffective’ or ‘ineffective’ up 60% from 2006. Only 14% of the 70 recruiters polled said that print was a good way to find employees. One interesting piece of information from the study: Recruiters did give print high marks for finding blue-collar candidates.”


That’s not going to help the news from the front offices, which just keeps getting worse. Media Post has the icky details here and here. The Q4 earnings reports show little to be optimistic about. E.W. Scripps said newspaper revenues fell 8% in 2007, largely due to competition from digital media.The Washington Post Company saw print revenue drop 11% in Q4 from a year earlier and full-year ad revenues were down 13%. McClatchy revenue was off 14% in January.
Gannett, whom Hawaii congressman Neil Abercrombie recently said is “doing great,” said January revenues fall 7.5%, driven by newspaper advertising revenue declines of 9.2%. Media General’s 8% drop in January revenues was largely due to a 17.3% decline in newspaper ad revenues, An ominous trend is that online revenue growth is slowing. January online revenue at the Post grew at 11% or half the growth rate of the previous January. McClatchy’s online sales growth was just 2.6% year-over-year.

Goldman Sachs issues its opinion on the sector in that odd, neutral investor-speak that market analysts use: “We see nothing on the near-term horizon to alter our long-held view that investors should remain underweight [in] the sector.” Its index showed that classified revenue plunged 20% in January. For the newspaper companies Goldman covers, overall revenue turned in the worst performance since Q4, 2001, a quarter that had the disadvantage of hosting a major terrorist attack. There was no such excuse this time.

It’s getting a little bizarre out there

Perhaps some unscrupulous publishers are taking advantage of the situation

  • In the first case of its kind that we can remember, a publisher has been fined for running a journalism sweatshop. E&P reports that the Chinese Daily News has to pay $5.2 million for allegedly forcing reporters to file five stories a day and to rush between news conferences and interviews. Ad quotas were unreasonably high and production workers were forced to labor nonstop. Reporters testified that they had to work six days a week, 12 hours a day, but weren’t able to complain because of pressure and the culture of intimidation. We’ve heard that morale is bad in newsrooms pretty much everywhere, but this is extreme!
  • And this would be funny if it weren’t true. The following item is reprinted in its entirety from Media Post: Under a new Wall Street Journal policy, if a reporter writes a book based on a newspaper story, Rupert Murdoch wants a piece of the action, reports Crain’s New York. Any reporter’s book that uses research for Journal stories would qualify. In exchange a share of the book’s proceeds, the newspaper provides marketing and advertising support for the title. Most publishers do not require such a fee.”

Bright spots: some small-town papers are thriving

Not all newspapers are suffering. While the big metro dailies struggle to become more local, a host of existing local newspapers are seeing revenues and circulation grow to record levels. The secret seems to be focusing on mom-and-pop advertisers, making editors a part of the communities they serve and coming up with new ways to get the paper into the hands of everyone in the community.

E&P reports on several, including “the publisher of two paid Texas weeklies that between them don’t quite sell 5,000 copies: the Aransas Pass Progress and the Ingleside Index. The papers ended 2007 up 14% in ad revenue from 2006. ‘We are planning for a similar 2008,'” the publisher says.

Most of these papers are free, by the way, and that’s how they’re getting results for advertisers. Quoting one publisher: “I can remember for years Bill Dillard, the head of [department store] Dillard’s, would tell all of us daily newspaper publishers year after year — you have to get into more households. I don’t think he said you have to go out and get more paid subscribers.”


Alan Mutter has expertly documented the crumbling business models of American newspapers, often finding insights in the financial reports that everyone else has missed. In this post, he focuses on the good news: there’s evidence that some small publishers are figuring out innovative new publishing models that are both profitable and popular with their readers. The one thread through all of them is that they target small audiences.

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Comments Off on More dismal newspaper earnings, but some bright spots, too

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  1. March 10, 2008 @ 11:35 pm



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