June 15th, 2007
Is New York Times Print Ad Revenue Declining By Double Digit Percentage?
If I were in a shareholder of a newspaper or any print based media company, I’d be demanding that financial reporting breakout the absolute amount of print and online revenue, rather than concealing the actual amount by which increasing online ad revenue is offsetting decreasing print ad revenue — or rather the degree to which it’s failing to.
Here’s what the New York Times reported for May 2007:
Advertising revenue for the New York Times Media Group dropped 9.1 percent as national, retail and classified advertising all declined. Ad revenue for the New England Media Group fell 8.8 percent. The Regional Media Group saw the largest decline, with a 14 percent drop in sales.
Internet ad revenue for the New York Times, New England and Regional media groups surged 21.4 percent as display and classified advertising increased.
And here are the detailed numbers:
It’s clear from the net 9.9 percent decline in total ad revenue (excluding About.com — and NOT 9.1 percent as reported in the press release!) that increasing online ad revenue is nowhere near making up for declining print ad revenue — but how much is the print ad revenue actually declining? For all investors know, it could be declining by 20%.
Let’s do some investigative math and see if we can figure it out. In the transcript of the New York Times Q1 07 investor conference call, you’ll find this:
About.com had another strong quarter. Total revenues grew 24% to $23 million
and this
In total, our digital businesses generated about $74 million, or nearly 10% of the company’s revenues in the first quarter. Last year, our digital businesses accounted for 8% of the company’s revenues.
Let’s take that data, the May 2006 and 2007 numbers above, the $483,594,000 in total News Media Group ad revenue from the Q1 07 10K and see what we can figure out:
So if this is right (feel free to check my math), then May 2006 to May 2007, print ad revenue for the News Media Group decline $19.2 million or 14.4%, dwarfing the $2.8 million increase in online ad revenue. Not a great advertising trend ratio.
I’m picking on the New York Times because they are among the most savvy newspapers online, and it’s still not enough to compensate for the decline in print. The New York Times was also pretty forthcoming with information in their conference call — but they’re not about to do the math for you. Nor is any print publisher.
But inquiring investors should want to and deserve to know.
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I can’t blame MediaPost for the lack of clarity in its coverage, since the data that the NYTCO releases is so difficult to parse. For a previous NYTCO earnings release, I rolled up my sleeves to figure out exactly how much print advertising had declined, but that’s not an exercise that most investors or industry observers will take the trouble to do. Honestly, I can’t really blame NYTCO or other newspapers for hiding the details on their bad news. If I were in their position, I’d be very
billet de Scott Kar sur les difficultés financières du New York Times. Ce dernier, après calculs sur les comptes du journal, conclue : So if this is right (feel free to check my math), then May 2006 to May 2007, print ad revenue for the News Media Group
very good analysis today
[IMG ]Scott Karp did some math, last week, on the NY Times report of ad revenues for may 2007. He analysed the percentages and went through the detailed numbers. The result is, in terms of dollars, the declining print revenue compared to the increased online revenue.
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This analysis suggests to me that newspapers might be closer to extinction than anyone now thinks, as I discuss in my post at thefutureofnews.com
You could also add to this analysis by digging out the number of ad pages reported and comparing trends in volumes to revenue trends, which would then give you trends in overall print yields.
[…] this the other day, but my friend Scott Karp had a great, in-depth look at the New York Times and its advertising revenue picture — trying to sift through the various financial tea leaves and figure out in dollar terms (as […]
[…] this the other day, but my friend Scott Karp had a great, in-depth look at the New York Times and its advertising revenue picture — trying to sift through the various financial tea leaves and figure out in dollar terms (as […]
[…] Is New York Times Print Ad Revenue Declining By Double Digit Percentage? Scott Karp does the math so I don’t have to. […]
But should you be looking at profit from each of these two operations? I believe online revenue translates into much higher profit margins than print revenues, largely because you don’t have to pay for paper and trucks… or maybe you’re assuming the copy sales cover these expenses.
[…] ad revenue increase of 22 per cent. This is a story that my friend Scott Karp of Publishing 2.0 has told before and will likely be told again. newspaper, NYT, online | Share […]
[…] a previous NYTCO earnings release, I rolled up my sleeves to figure out exactly how much print advertising had declined, but that’s not an exercise that most investors or industry observers will take the trouble […]