Zacks Industry Outlook Highlights: New York Times, Gannett, McClatchy and Journal Communications
CHICAGO, April 7, 2014 /PRNewswire/ -- Today, Zacks Equity Research discusses the Publishing, including New York Times Company (NYSE: NYT-Free Report), Gannett Co. Inc. (NYSE: GCI-Free Report), McClatchy Company (NYSE: MNI-Free Report) and Journal Communications, Inc. (NYSE: JRN-Free Report).
The U.S. publishing industry has long been grappling with sinking advertising revenue, and the global economic downturn only worsened the situation. The downturn in the publishing industry, which has been going on for the last few years now, came in the wake of declining print readership as more readers choose to get free online news, thereby making the print-advertising model increasingly under pressure.
Changing consumer preferences and the advent of new and innovative technologies have been altering the way news is read and offered. Readers now have more choices to collect and read articles and news through devices such as netbooks, tablets or other hand-held devices.
These have been weighing upon the print newspaper industry, as advertisers now get low-cost avenues through which they can reach their target audience more effectively. An alternative and stable source of revenue is the demand of the time to salvage the dwindling print newspaper industry.
Let's have a look at what is happening in the publishing industry and how newspaper companies are adapting with the changing scenarios to keep themselves alive in the race for survival.
Circulation Falling Prey to Internet
Newspapers have fared far worse than magazines, as web-based news options have gotten the upper hand in recent years. The two-decade-long erosion in newspaper circulation reinforced the decline in advertising revenue. Circulation has also fallen prey to budget cuts with newspaper companies reducing the number of print pages and newsroom staff to combat the downturn.
Despite the fall in newspaper circulation, some companies are reporting improved revenue from circulation due to the increase in subscription and newsstand prices. On the flip side, while the increase in prices for print editions is generating more circulation revenue, it is also resulting in subscriber losses due to the shift in preference for free online content.
Waning Newspaper Advertising Revenue
Advertising volumes are still under pressure as advertisers keep shying away from making any upfront commitments in an economy which is still not completely awoken from a state of hibernation. According to data released by the Kantar Media Intelligence, advertising expenditures during 2013 fell 3.8% in Local Newspapers and 3.6% in National Newspapers due soft advertising demand across Financial Service, Retail and Motion Picture marketers.
Print advertising revenue at The New York Times Company (NYSE: NYT-Free Report) dropped 6.3% in the fourth quarter of 2013. At Gannett Co. Inc. (NYSE: GCI-Free Report), publishing advertising revenue fell 10.3% in the quarter. Print advertising revenue tumbled 8% at The McClatchy Company (NYSE: MNI-Free Report). Publishing advertising revenue dropped approximately 11.8% at Journal Communications, Inc. (NYSE: JRN-Free Report) during the quarter.
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