CHICAGO, Feb. 18, 2011 /PRNewswire/ -- Today, Zacks Equity Research discusses the Publishing Industry, including: The New York Times Company (NYSE: NYT) and Gannett Co. Inc. (NYSE: GCI).
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A synopsis of today's Industry Outlook is presented below. The full article can be read at Link: http://www.zacks.com/stock/news/47789/Publishing+Industry+Outlook+-+Feb.+2011
The publishing industry had long been grappling with sinking advertising revenue, which was exacerbated by the global economic meltdown. This reflected a longer-term secular decline as more readers get news free online, thereby making the print-advertising model increasingly irrelevant.
Circulation Falling Prey to the Internet
Newspapers have fared far worse than magazines, as web-based news options have proliferated in recent years. The two-decade-long erosion in newspaper circulation reinforced the decline in advertising revenue. Circulation has also fallen prey to budget cuts with newspaper companies reducing the number of print pages and newsroom staff to combat the downturn.
However, the recent data available from the Audit Bureau of Circulations (ABC) indicates that the rate of decline in circulation is easing. Newspaper circulation tumbled 5% for the six months ended September 30, 2010, reflecting an improvement over a decline of 8.7% registered for the six months ended March 31, 2010.
Despite the fall in newspaper circulation, some companies are reporting higher revenue from circulation due to the increase in subscription and newsstand prices. While the increase in prices for print editions is generating more circulation revenue, it is also resulting in subscriber losses due to the shift in preference for free online content.
Newspaper Advertising Trend Improves
With the gradual improvement in the economic conditions, positive trends are emerging in both print and digital advertising driven by an improving outlook for advertiser spending. Consequently, the rate of decline in advertising revenue is decelerating.
According to data released by the Newspaper Association of America, total advertising revenue for U.S. newspapers slipped 5.4% in third-quarter 2010 (July to September) to $6.1 billion, after falling 5.6% in the previous quarter, reflecting the 17th consecutive quarter of decline. The trend reveals a gradual improvement in the advertising environment.
Print advertising declined 7.1%, after declining 7.6%, 11.4%, 25.6% and 29%, respectively, in the previous four quarters.
Print advertising revenue at The New York Times Company (NYSE: NYT) dropped 7.2% in fourth-quarter 2010. At Gannett Co. Inc. (NYSE: GCI), publishing advertising revenue dropped 4.7% in fourth-quarter 2010.
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