As Gannett’s brand morphs, print still top of mind
For a handful of years now, several newspaper companies have attempted to re-brand themselves into something — anything! — that doesn’t associate them with newspapers. Gannett is one of the latest examples trying to put some distance between itself and the industry despite the fact that it is still the largest newspaper chain by circulation in the U.S., it still derives the heft of its revenue from ink on paper, and it still is a bellwether for other companies that count big iron as an asset.
The USA Today publisher trips all over itself with its description. Here is part of the boiler plate the publisher and broadcaster uses:
“Gannett Co., Inc. is an international media and marketing solutions company that informs and engages more than 100 million people every month through its powerful network of broadcast, digital, mobile and publishing properties.”
The Street isn’t buying it at least today. Shares of Gannett fell about 9 percent so far after the company announced its Q1 results. It’s EPS beat Wall Street’s view by a long-shot. Its revenue was pretty much in line with expectations. So what gives? It’s the company’s slide in advertising revenue, specifically at its publishing division where it declined a little more than 8 percent, that accounts for the beating.
In fairness, Gannett’s CEO Gracia Martore said it is going to take some time for the company to start reaping results from the plan it rolled out to investors in February that included a pay model at its newspaper properties. On a call with analysts this morning about Gannett’s results, Martore said Gannett is “working to stabilize our Publishing business,” but that the effort is not a ” quick fix.”
“This isn’t a one- or two-quarter solution. Rather, it is a continuous effort which is going to begin to show results later this year,” she said.
Yahoo and newspapers 18 months after APT
When Media General reported its quarterly results this week, the company made sure to highlight that its increased digital revenue — up 8 percent — was due in part to its relationship with Yahoo.
“It’s one of the few game-changing partnerships we have had,” Media General digital media president Kirk Read said in an earlier interview.
The publisher of The Tampa Tribune and Richmond Times-Dispatch is part of the 800 or so newspapers that appointed Yahoo to be one of its digital sherpas. The partnership involves ad serving technology, content sharing and, until the sale of Yahoo’s Hot Jobs to Monster, online recruitment. Since the Internet giant launched its ad platform known as APT 18 months ago, the alliance has sold $100 million in Yahoo inventory.
The APT platform allows newspapers to expand their digital footprint within the marketplace by selling online inventory of both Yahoo’s local sites and the newspapers’ web sites. One of benefits of APT is that it allows advertisers to target ads to specific audiences. Newspapers and Yahoo share the revenue for ads sold on Yahoo’s site.
“Things exceeded our expectations,” said Lem Lloyd vice president of channel sales of Yahoo. “The way we think about it is we have built an infrastructure in which to take advantage of a huge local ad share shift that is happening and accelerating over time.”
Gannett, which sat on the sidelines since newspapers formed a consortium with Yahoo in 2006, announced last week that the company will be using APT at its newspapers and television sites beginning in the fall.
“We didn’t see any reason to hurry into the alliance when the technology and business model didn’t exist,” said the president of Gannett’s digital ventures Jack Williams. Gannett is still not part of the formal alliance.
A familiar name picks up coverage of Gannett
For those following Gannett Co. second quarter earnings on Friday, a familiar name might be popping in on the line. Douglas Arthur — the sharp analyst late of Morgan Stanley known for such hits as “Knight Ridder: A Scenario Analysis”– is back covering the sector again. Or something akin to it.
Arthur initiated coverage of Gannett for Evercore Partners last week, stamping Gannett with an “overweight” rating and a price target of $18. It’s likely his report sent shares in the newspaper and broadcasting company soaring about 6% to$14.16 on July 7 close.
Newspaper companies used to be covered by a boatload of analysts until around 2008 when they started dropping like flies. Maybe if a few more come back into the fold we’ll be looking at an upward trend.
Dear newspapers: Happy holidays from John Janedis
Take heed and rejoice, you hard-working newspaper elves. Someone on Wall Street thinks that some newspaper companies aren’t dancing quite as close to the abyss as conventional wisdom says.
Wells Fargo analyst John Janedis, never known for going too easy on newspaper stocks, raised his rating on USA Today publisher Gannett to “outperform” and his rating on The New York Times to “market perform.”
His explanation: “After years of downward revenue estimate revisions, it appears as though the newspaper ad market is improving more quickly than we previously anticipated, particularly in December. Given current trends, we now expect approx. high single digit decline in overall newspaper advertising in 2010.”
New York Times and Gannett shares are already rising in pre-market trading on Wednesday morning. They’re thinly traded to begin with and this is a time of generally low volumes anyway. That said, if those shares rise today, it won’t be just because they’re made of helium. I wouldn’t be too surprised if other newspaper stocks rise too. At a time when several U.S. newspaper publishers have filed for bankruptcy, advertising revenues are skidding, people are getting news for free online and no one in the journalism business has found a convincing way to adapt to the changing times, this is a real gift.
Here’s more from the Janedis note, mostly technical stuff, though we want to point out that he’s raising his fourth-quarter earnings estimates for both companies, another fine thing:
We are upgrading Gannett to OP from UP and New York Times to MP from UP. We raised our 4Q09 and F10 EPS estimate for GCI to $0.69 and $1.95 from$0.61 and $1.55, respectively and our valuation range to $18-$19 from $7-$8. We raised our 4Q09 and F10 EPS estimate for NYT to $0.43 and $0.67 from$0.42 and $0.61, respectively and our valuation range to $10-$11 from $7-$8. We are also increasing our sector rating to Market Weight from Underweight. …
The New York Times newspaper: Based on our checks and with only a few publishing days left in 4Q09, we think there’s a chance that the paper could post flattish ad revenue for the month. Categories demonstrating significant improvement are banks/financials, national auto, and telecom, all up 75%+. Key ROP advertisers MTD include AT&T, American Express and GM. While the sustainability is unclear, the comps remain particularly easy for the next several months. While still solidly negative, classifieds have also improved. …
Dear,Mr.John,
Your article on my favorite newspaper, New York Times had become market oriented newspaper.
My conscience says that,your views can be agreed to certain levels.
Due to internet invention,mobile news, same news on current topics by using different English words with attractive news readers,reality bite stories, film persons interview with their fans, and lot of changes in modern printing,tough competition with existing newspapers,magazines, and free news media week in India on every week end, and all the above reasons for downfall in daily,monthly and yearly circulations.
As per constant views, Many American youngsters,students,adults are not much interested to read or see any political,burning world issues in time.
Whatever outcome of these adverse effects, Ray of Hope, revivalism had happened in New York Times.
One thing, if you all means,news readers,reporters, many big,once highly circulated medias with recent big business tycoons who have more control,new thinking on charging newspapers on line will be a smooth and it may curtail freedom of speech,freedom expressions to free world.
If newspapers owners wants to get more revenue,more readership,more advertisement, and more income generation and there are other ways to do by clear introspections and usages of modern professionals.
How I learned to stop worrying and love bad newspaper news
We had a hard time finding the good news in Monday’s report that U.S. newspaper circulation has fallen more than 10 percent, based on an analysis of 379 daily papers. Thank goodness for the newspapers whose publishers helped them understand why losing hundreds or thousands of paying readers is good.
Most papers acknowledged deep declines in circulation, but explained it in one of the following ways:
- We had to clear out all the bulk copies sold at discount. (I’m still not sure how this one works because I recall publishers saying this a couple of years ago. How many deadwood readers are there?)
- We shrank our coverage area so of course we lost some circulation. It tells advertisers that they’re getting a BETTER quality of reader.
- We’re charging more for the paper so circulation revenue has risen, and anyway, who wants to rely on a business as fickle as advertising (the one that lined our owners’ pockets for the past 150 years.)?
- Readership is rising on the Internet.
- At least we didn’t get whacked as bad as the next guy.
All these statements are true, and they all are good business moves. What I can’t find among the numbers is what percent of print decline at many of these papers is because of the other reasons that you hear from people. Some are legitimate, some aren’t and some are just silly. All say one thing: Many people don’t pay for the paper anymore, which means there’s less money to keep them in business. (Don’t believe us? Ask the Rocky Mountain News and the Seattle Post-Intelligencer):
- I hate my newspaper
- My newspaper doesn’t have anything interesting in it
- News is boring
- News is free on the Internet
- My newspaper is biased to the right/left/middle/other Little League team than the one my kid is on
- My paper stopped running Garfield in the funnies. It doesn’t run Hints From Heloise anymore.
- You can’t get good TV listings anymore
- I don’t care about anything that happens in the rest of the world or outside my front door.
- There’s not enough local/regional/national/world news here.
- The sports section sucks.
- It always arrives too early/late for me to read it.
Here are samples of how some papers handled Monday’s news:
San Francisco Chronicle headline: Chronicle’s strategy shift starts to pay off
Pointer:
1. Thanks for contributing to the recursion, but I disagree.
2. They pay me in the news business to cover the news business.
3. There are people inside and outside journalism who say that news outlets shouldn’t cover themselves and shouldn’t cover the news business. They say that it bores the reader and that it is essentially writing for a small group whose emotional and professional inbreeding are well known.
4. I disagree with that. Covering the news business now, as everything about it changes and threats to its survival mount, is an exciting story to tell people. I also believe that you can promote transparency and trust in news organizations by telling the public in an easy-to-understand way how the business works. You don’t have to go to the grain-by-grain level of Editor & Publisher; you should write, as I constantly say, stories that Mom can understand, whether she’s a high school dropout or a PhD. This is necessary now more than ever as more people harbor paranoid, fearful mistrust of the news.
Wall Street Journal vs USA Today — Part II
Earlier this week I brought you the brewing circulation tussle between USA Today and The Wall Street Journal, and which paper will be able to claim to be the largest one in terms of circulation. You can read that here, but for the recap, here are the main points:
- Editor & Publisher reports: USA Today was set to report that circulation fell “17% to 1.88 million for the six months ending September 2009, a drop of about 390,000 copies. The decline could also threaten USA Today’s position as the No. 1 newspaper in the country by circulation.”
- The Wall Street Journal and The Associated Press report that the Journal would be the largest paper by circulation, according to the Journal.
- USA Today responds, “We are confident that even with this latest economic impact, USA TODAY will remain the nation’s number one newspaper in total print circulation when the ABC statements are released October 26th.”
As I wrote at the time, it seems that the Journal is counting print and online subscriptions together, and why not? Both are made up of paying subscribers. USA Today, of course, is counting printed newspapers.
We won’t know until their circulation numbers are published on October 26 what the final, comparable figures would be. But today, the Journal revealed its latest numbers:
Circulation was 2,024,269 as of the six-month period ending in September 2009, compared with 2,011,999 in the same period a year ago. Individually paid circulation, a number that advertisers like to watch, grew to 1,437,853. That’s impressive, having any growth at all.
As to how it stacks up to USA Today, and who will be able to claim to be the No. 1 newspaper publisher by circulation, we’re going to have to wait until the 26th.
(Photo: Reuters)
WSJ vs USA Today: Who has the biggest paper?
USA Today and The Wall Street Journal aren’t waiting for Oct. 26, the day North American newspapers report their latest circulation numbers, to begin tussling over which one has the biggest paper.
Editor & Publisher made the first move on Friday when Jennifer Saba reported that USA Today was set to report that circulation fell “17% to 1.88 million for the six months ending September 2009, a drop of about 390,000 copies. The decline could also threaten USA Today’s position as the No. 1 newspaper in the country by circulation.” The news came in a memo from USA Today Publisher, David Hunke, to his workers.
Spicy stuff, considering that when we write about its owner, Gannett, we say it is the largest U.S. newspaper publisher that publishes USA Today, the largest newspaper by circulation.
The Wall Street Journal’s Shira Ovide wrote up the news too, adding this: “After USA Today’s memo, the Journal said it is now the largest U.S. newspaper by weekday circulation.” Andrew Vanacore at The Associated Press, featured the Jornal echoing that statement: “Dow Jones, the Journal’s parent company, declined to give out the newspaper’s circulation figures for the period, but spokesman Robert Christie said, ‘The Journal is now the largest newspaper by circulation.’”
We wrote up the story too, going along the same lines. The next day, however, we got this statement from USA Today’s communications vp Ed Cassidy – a bit too late to run it as an update to our old story. Still, it piqued my interest in a big way because it doesn’t go along with the lines of what we reported earlier:
We are confident that even with this latest economic impact, USA TODAY will remain the nation’s number one newpsaper in total print circulation when the ABC statements are released October 26th.
So how do we figure this? It’s hard to conclude when the numbers haven’t come out yet. I suspect that both papers can make the claim to be No. 1 because the Journal is counting copies to subscribers who get only the online edition as adding to the total number of print subscribers. Newspaper publishers argue over whether those copies “count,” but it seems like they should considering that people pay for Web access in the same way that they do for print.
Circulation is irrelevant except to insert advertisers. The only real measure of impact is audience and for newspapers that remains adult readership.
Wednesday media highlights
Here are some of the day’s stories about the media industry:
Recession sends Americans to the Internet (Reuters) S. John Tilak writes: “More than two-thirds of American adults — or 88 percent of U.S. Internet users — went online for help with recession-induced personal economic issues and to gather information on national economic problems, a study released on Wednesday said.”
BBC and Government Fall Out Over Financing Plan (NYT) “The BBC and Britain’s Labour government, which has a history of support for the “Beeb,” have fallen out over a government plan to share some of the broadcaster’s £3.6 billion in public funding with its commercial television rivals,” writes Eric Pfanner.
USA Today introduces Newsdeck site for top headlines (Editors Weblogs) “To give visitors another way to view the news, USA Today has introduced a site it calls Newsdeck that compiles the top headlines in an easy-to-read format. Users can scroll through stories in eight categories, including News, Money and Sports, with the ability to switch back and forth between the latest news and the most popular articles.,” writes Liz Webber.
Bing’s First Month A Bust (Business Insider) Dan Frommer writes: “Microsoft’s U.S. search market share was 8.4% in June, up from 8.0% in May, according to comScore. It would have been a disaster if Bing didn’t grow at all with all that advertising and free promotion vianews coverage, so at least it’s up a little.”
In other news:
Wednesday media highlights
News about the media industry:
Netflix looks to future but still going strong with DVD rentals (USA Today) “Netflix CEO and co-founder Reed Hastings doesn’t think his 58 distribution centers are in immediate danger of becoming obsolete, but he knows that day will come. He believes DVD rentals have four to nine years to keep growing, despite inroads in Internet delivery of movies to set-top TV boxes and other video-on-demand options,” writes Jefferson Graham.
Is the bell tolling for Clear Channel? (San Antonio Express-News) David Hendricks writes: “Analysts believe Clear Channel, now with about $22 billion in total debts, will have trouble making scheduled payments later this year. The company, already down to about 800 stations from its peak of about 1,200 stations, either will have to start selling stations itself or go into bankruptcy, where lenders will put stations up for sale.”
Foes No More, Ad Agencies Unite With Internet Firms (NYT) Eric Pfanner writes: “With consumers spending more and more time online, analysts say Internet companies and ad agencies have no choice but to work together to develop ways to make money from digital media.”
In other news:
Hangin’ with USA Today’s new masthead
Gannett Co Inc has not been too generous lately with making its executives available to media reporters. And why would it? Few newspaper publishers have because there’s little good to say about the business.
Ad sales are tanking, as usual. Debt is looming (what else does it ever do?). Lots of self-styled media experts can’t let a day go by without writing a few blog posts telling publishers that they brought it on themselves and they deserve to die.
With that merry backdrop, I was surprised to get invited to a press conference and an interview with Gannett’s latest picks for editor (John Hillkirk) and publisher (Former Detroit Free Press Publisher David Hunke) of USA Today. Gannett brought them to New York to meet the insular Manhattan media world, which is responsible for writing all those obituaries that you’ve been reading about newspapers lately.
Here are some excerpts (paraphrased as well as verbatim) from our conversation on Wednesday afternoon at Gannett’s New York bureau at Madison Avenue and 54th Street:
Advertising revenue is down by some 30 percent versus last year. Publishers say much of this is because of the recession. How far down would ad revenue be without the financial crisis?
About 10 percent, Hunke guessed.
Nobody we talk to in the newspapers around the United States is very happy. At Gannett, they’re dealing with layoffs, furloughs, you name it. What can management do?
