StockCall Review on Gannett and New York Times: How to Fight Declining Ad Revenue
LONDON, February 7, 2013 /PRNewswire/ –
The shift to digital has had a downbeat impact on the newspaper publishing industry.
Over the last few years, publishing industry has seen advertising revenue on a freefall.
The weak economic environment has not been kind as well as for the industry as companies
slashed their advertising budgets. For publishers such as Gannett Co. Inc. (NYSE: GCI) and
New York Times Company (NYSE: NYT) these are challenging times. However, publishers have
been looking at ways to offset declining advertising revenue. StockCall has released its
most recent technical analysis on Gannett and New York Times. Register today and access
these reports for free at http://www.stockcall.com/analysis
Advertising Revenue Continue to Drop
Data released by the Newspaper Association of America showed that in the third quarter
of 2012, advertising revenue for U.S. newspapers dropped 5.1% to $5.27 billion. This was
the 25th straight quarter of decline in advertising revenue for newspapers. While the
shift to digital has been the major reason behind a drop in advertising revenue, weak
economic environment has also contributed to the downturn.
Publishers Fighting Back
Newspapers publishers, however, have been fighting back. Companies in the publishing
industry are looking at ways they can offset declining advertising revenue. Some of the
steps taken by publishers include implementing cost-cutting measures and selling non-core
Last year, New York Times announced the sale of About Group to IAC for $300 million in
cash. Chairman Arthur Sulzberger Jr. said that sale will allow the company to focus on the
development and growth of its core brands locally, nationally and on a global scale.
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In addition, publishers have also boosted their online offerings. Publishers have also
raised their subscription and newsstand prices in order to offset the decline in
advertising revenue. Also, a number of prominent newspapers, including the New York Times,
now charge for access to online content.
Newspaper companies are also using multiple platforms to engage readers. Last year,
New York Times re-launched its Android News app. The redesigned app has been formatted for
optimal reading for all tablets and phones running on Android operating system.
Another positive for the publishing industry is an improving economy. While a full
recovery is still some way off, the outlook for the global economy has improved
significantly since the start of 2013.
Gannett’s Strong Q4 Results
On Monday, Gannett released its fourth quarter financial results. Gracia Martore,
Gannett’s President and CEO said that the company’s local domestic publishing circulation
revenue increased for the third straight quarter, driven by the success of the company’s
all access content subscription model. Martore said that the company is meeting or
exceeding the revenue and operating profit goals it had for the all access content
subscription model. Sign up to download the free report on Gannett at
Gannett’s publishing segment reported fourth quarter operating revenue of $1.04
billion, up 3.7% over the same period in the previous year. The increase was due to an
extra week and a rise in circulation revenue offset partly by lower advertising revenue.
The company’s local domestic circulation revenue for the quarter rose 23.6%.
Gannett’s total revenue for the quarter rose 9%.
New York Times will report its fourth quarter financial results on today (At the time
this article was completed, NYT’s earnings were still not available).
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