Tuesday, April 15, 2008

Do you believe Statistics Canada?

Luckily there is an official agency that keeps track of important economic indicators in Canada, so we're not left entirely to the tender mercies of the news media to inform us about the state of their own business. Aside from periodic government inquiries into the press -- the most recent of which two years ago showed newspaper profits around 20 percent -- Statistics Canada keeps track of things like advertising revenues and company profits. Despite the media's pleas of poverty to justify massive layoffs of journalists, Statscan's latest figures show that ad revenues went up 2.7 percent, not down. Sure, the numbers are for 2006, and 2007 may show a downturn with the economy heading south, but that's a cyclical phenomenon that follows the economy.

Advertising revenues, the source of three-quarters of industry revenue, rose 2.7% to $3.98 billion in 2006. Daily newspapers
generated $2.85 billion in advertising revenues, compared with $1.13 billion for community newspapers.
The upturn in newspaper fortunes was most pronounced in Western Canada, where our favorite converged news media company, CanWest Global Communications, dominates. Newspaper operating revenues for publishers in the four western provinces rose 3.9 per cent - almost twice the growth rate in Central Canada, pushing profits to 21.1 per cent from 18.2 per cent.

Even circulation revenue increased in the latest count, despite audited numbers that show sales down drastically. According to Statscan, circulation revenue blipped up 1.5 percent, although the industry claims that changes in accounting practices are responsible for the increase. I think this helps prove the point I made back in 2006 that just because circulation sales went down, it doesn’t mean that revenue followed suit, because it gets more and more expensive to distribute copies to farther-flung areas, and newspapers can actually save money by cutting back on deliveries.

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