Tuesday, April 29, 2008

Canadian newspapers defy gravity

While the bloodletting continues at U.S. dailies, with earnings and circulation coming in down sharply, Canadian newspaper revenues continue to defy gravity. Monday’s Audit Bureau of Circulations data showed major dailies down 3.6 percent for the six months ended March 31, with only the national newspapers USA Today and the Wall Street Journal showing increases, albeit less than one percent. In Boston, the dailies were particularly hard hit for some reason, with the Globe down 8.3 percent during the week and the Herald off 9.5 percent. While I am on the record as believing much of the circulation loss is strategic, with dailies cutting unprofitable distribution, there is no denying that profits have been going through the floor recently at U.S. dailies, with revenues down 7.9% in 2007. Now that first-quarter earnings are starting to come in, it is obvious that trend is not only continuing, but accelerating. Gannett’s earnings were off 9 percent, with ad revenue down 12.8 percent overall, led by real estate and job ads tumbling 26.3 and 24.2 percent respectively. McClatchy even posted red ink, recording a loss of $849,000 compared with a first-quarter profit of $9 million last year, as advertising revenues fell by 15 per cent.

Canadian newspapers aren’t as swift at counting as their American cousins, so 2008 numbers aren’t in yet, but judging by the recently-released 2007 figures, they seem to be holding their own. A two-percent drop in print advertising last year was basically offset by a 30-percent rise in the smaller category of online ads. The Canadian Newspaper Association has an interesting graphic in its latest report tracking ad revenues over the past decade compared to those in the U.S. It shows a steady rise over that period, despite the wild dips taken in the States recently, and during the 2000 stock market crash. CNA President Anne Kothawala urged media buyers not to be influenced by “tainted” results in the U.S.
"Advertisers and their agencies, many of whom are global businesses, should ensure that their Canadian buying decisions are not tainted by the US data. In an age when consumers are increasingly tuning out advertising content, studies show they continue to find newspapers engaging. Many readers turn to their paper as much for the ad content as the editorial content. The real story is how well we are holding our own in an age of global media disruption.”
I will suspend my disbelief in this gravity defiance until I see whether the trend continues into 2008 in the face of U.S. housing starts falling to their lowest level in decades.

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