Thursday, October 18, 2012

By the numbers | GCI's weaning from print ads

Newsweek's announcement this morning that it would stop publishing a print edition starting early next year makes the magazine the latest media outlet to move toward an all-digital format.

The 80-year-old weekly's disclosure came the same week Gannett announced another decline in advertising revenue from its newspapers and other published products: Third-quarter ad revenue fell 6.6% to $552.7 million from a year before, Corporate said on Monday.

To be sure, publishing ads are still GCI's single-biggest revenue source. But as a percentage of overall revenue, their share continues to fall:

of overall $1.30 billion in Q3 2012 revenue was from publishing

of $1.27 billion in Q3 2011

of $1.31 billion in Q3 2010

of $1.31 billion in Q3 2009

of $1.64 billion in Q3 2008

Related: change in quarterly revenue by division since January 2011.

[Data: company news releases; graphic: the current Newsweek cover]


  1. Hey Jim, isn't it great that Gannett's shares are getting re-rated and the company is doing well again. Digital revenues are soaring and the new cover price strategy is really starting to work. Onwards and upwards from here on...

  2. 2:58 It is good to see Gannett reporting higher quarterly revenue and profits -- including from digital revenue.

    But some context is in order.

    Company-wide digital revenue rose 22.8% to $335 million in the third quarter from a year before, mainly from higher circulation revenues plus digital advertising and solutions.

    But while Corporate says those higher circulation revenues come from the "impact" of the new paywalls ("all access content subscription model"), that's misleading; in fact, they really come from increases in print subscriptions that now come bundled with digital access, whether readers want it or not.

    It's true that those average 25% subscription increases are an important source of new revenue, and are forecast to add $100 million in earnings starting next year.

    But that's looking like a one-time event, unless Corporate imposes another round of double-digit subscription price increases in 2013 or early 2014.

    Meanwhile, the rate of revenue growth in the Digital Segment isn't as robust as it once was. In the most recent quarter, it rose 4.7% to $182 million from a year before -- barely changed from 4.5% in the second quarter.

    The Digital Segment should be the fastest growing, because it includes CareerBuilder, PointRoll and other purely digital businesses. Indeed, the segment accounts for slightly more than half of all company-wide digital revenues.

  3. Print will be dead within two years, and with it, 50% of our jobs.

  4. An 18% drop in Q3 revenue since 2003 is not good.

  5. Yes, revenues are down 18%, along with the vast majority of other businesses which are exposed to the vagaries of the economy. The world has changed a lot since those days.

    We should be encouraged by the progress the company is making and it is looking good for the future. especially for our digital future.

  6. "An 18% drop in Q3 revenue since 2003 is not good."

    It's more like 35% since 2006.

  7. 3:25 PM - No, circulation revenue is not being attributed to digital.

  8. 12:52 Yes it is.

    In Monday's earnings release, Corporate says the following about the increase in digital revenues:

    "The increase was driven primarily by the impact of the all access content subscription model as well as higher revenue associated with digital advertising and marketing solutions across all segments."

    The all access model is a fancy name for traditional print subscriptions that now include mandatory digital access -- all for prices averaging 25% higher.

    How is that not attributing circulation revenue to digital?

  9. The earnings report clearly allocates subscription revenue between print and digital — it doesn't conflate them as you suggest:

    "The rollout of the all access content subscription model drove a 5.6 percent increase in
    company-wide [USCP, USAT and UK] circulation revenue. Circulation revenue at our local domestic publishing
    operations [USCP alone] grew for the second consecutive quarter and was up 9.8 percent.

    The impact of the all access content subscription model as well as an increase in digital
    advertising and marketing solutions resulted in a 64.6 percent increase in digital publishing
    . Digital revenues at our local domestic publishing operations [USCP] were 76.0 percent higher
    due primarily to the all access content subscription model."


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