Gloomy news from both the New York Times – its revenue and profits sank in 2016 (and the paper is now marginally profitable as a result), despite the Donald Trump-inspired record last quarter surge in digital subscriptions.
Meanwhile the Guardian in London continues to bleed millions of dollars a month, despite a sharp spike in the number of ‘members’ or supporters willing to make a payment to support the paper, and the Daily Mail group had good news about its huge MailOnline, and bad news about its print business.
The slide in revenues in print will be echoed by Fairfax Media (FXJ) and Seven West Media (SWM) when they release their half year figures this month, and by News Corp (NWS) on Friday morning when it releases its second quarter figures. The bottom line is that print ad spending in the major newspaper groups around the world fell sharply ast year and especially in the second quarter.
But there are small signs that digital subscriptions are picking up, thanks especially to the antics of Mr Trump. The NYT’s owners, The New York Times Co said late last week that paid digital-only subscriptions totalled 1.853 million (the net figure was around 1.6 million) as of the end of the fourth quarter of 2016, a net increase of 296,000 compared to the end of the third quarter of 2016 and a 45.9% increase compared to the end of the fourth quarter of 2015. Of the 296,000 additions, the company said 276,000 came from the Company’s digital news products, while the remainder came from the Company’s crossword product.
Over 2016 the there were 583,000 new subscriptions (around the current Monday to Friday print sales) additions, 514,000 came from the Company’s digital news products, while the remainder came from the Company’s Crossword product. Including the digital only subscribers, the paper now has more than 3 million subscribers in total, including the 1.6 million digital only; those who subscribe to its print edition (around 1.1 million, mostly of whom take the Sunday edition) and to its crossword product (over 250,000 for that group alone).
On that basis Donald Trump’s hectoring of the paper has been a big positive and he has helped improve its finances, for which he will no doubt claim credit.
But that good news couldn’t erase the bad on the print side. Print advertising revenue in 2016 fell 16%, driving a 9% drop in total advertising revenue. For the December quarter, print advertising revenue slumped a very nasty 20%. Total revenue for the year dipped 2% to $US1.6 billion (around $A2.1 billion), thanks to the weak print ad market.
There was growth in the digital business – a 6% rise in online ad sales to $US209 million and a 17% increase in digital subscription revenue to US232.8 million ($US61 million in the final quarter). The total of $US442 million is just over half the 2020 target for the company of $US800 million, as outlined in the 2020 internal report on the paper’s future released last week.
Fourth-quarter net profit sank 28% to $US37.1 million, from $US51.7 million in the last quarter of 2015. For the full year, net profit slumped 54% to $US29.1 million from $US63.2 million in 2015. But at least these are profits, the money left over after costs are taken out.
But for The Guardian in London no such joy and the news was nowhere near as positive. Staff were told this week that the Guardian Media Group expects to spend another 90 million pounds (or over $A145 million) keeping the paper afloat.
That’s 30 million pounds (Over $A28 million) higher than previous estimates. Staff were told that the paper had recorded negative cash flow for the year of 60 million pounds, which would rise further by the end of its financial year in March. If the final figure is 90 million pounds, that is 7.5 million pounds a month (close to $A12 million).
The media reports said losses before interest, tax, depreciation and amortisation are understood to be at about £35 million for the nine months to the end of December 2016. These are being absorbed by the Scott Trust, a charitable trust that funds the group. Its cash reserve is understood to be at about £743 million ($A1.2 billion) currently, down from £765 million last April.
Other media reports suggest the paper is thinking of saving money by closing its two printing plants and having another group contract print the paper. News UK has been mentioned.
But they were told that the number of paying Guardian “members” has grown from 15,000 to 200,000 in the past year, with a target of one million by April 2019. (Members do not receive extra or exclusive content but are paying to support the paper’s existence.
They are divided into three categories: supporters, partners and patrons. Monthly fees range from £5 to £60 and include benefits on event bookings. The trick will be to convert these people to permanent subscribers paying more money.
There were some encouraging first quarter ad revenue figures (thanks to the sharp fall in the value of the pound) for Daily Mail & General Trust (DMGT), publisher of the Daily Mail, a number of other titles and the MailOnline, the world’s most visited news website reported what were solid revenue figures on first reading, but which turned out to be just OK.
DMGT said reported a 38% rise in advertising revenues from MailOnline, boosted in part by a weaker pound. They were up 17% on an underlying basis with the impact of the lower currency stripped out.
There was a 12% slide in print advertising for the Mail and its Sunday title over the December quarter. Digital ads in the print editions were up 10%. At the same time, visits to the MailOnline website are no longer growing at double digit levels and were barely ahead of the previous year in the three months to December.
Online ad quarterly revenue at £32 million and print for those Mail and its Sunday edition titles at £36 million, the two are almost evenly matched.
Overall, advertising revenues across the Mail businesses as a whole, for print and digital combined, consequently increased by £4 million and, on an underlying basis, were in line with last year.
MailOnline’s average global daily unique browsers during the quarter was 14.4 million, up 0.7 million, or 5%, on last year, and the average global unique browsers per month were 223 million, an increase of 1% on last year.
The print pain just goes on.
