Projo hit by 61% drop in advertising since ’05; digital declining

March 14th, 2012 at 6:00 am by under Nesi's Notes, On the Main Site

By Ted Nesi

PROVIDENCE, R.I. (WPRI) – Advertising sales at The Providence Journal plunged by more than 60% over the last six years, forcing Rhode Island’s top newspaper to eliminate a third of its work force and to rely increasingly on subscribers and printing contracts to pay the bills.

The Journal’s total revenue dropped for a sixth straight year in 2011 to finish at $95.1 million, down 5% from 2010 and off 43% since 2005, parent company A.H. Belo disclosed in an SEC filing. Lower advertising and circulation sales were partly offset by $3 million in new printing and distribution contracts.

Journal publisher Howard Sutton declined to comment on the results. “The printed Journal has adapted to changing times, intensifying its focus on local and regional news and carefully managing its cost structure to match lower revenues,” A.H. Belo CEO Robert Decherd wrote in an op-ed on Feb. 26.

The Journal sold $52.9 million worth of advertising in 2011, down 11% from the prior year, with retail, preprint and digital lower but classifieds higher. Advertising has fallen a dizzying 61% at the paper since hitting $136.5 million in 2005, though last year’s percentage decrease was the smallest since 2007.

Smaller staff has more competition

“The company’s newspapers, and the newspaper industry as a whole, continue to experience challenges to maintain and grow print revenues and circulation,” A.H. Belo said in the SEC filing. “This results from, among other factors, increased competition from other media, particularly the Internet.”

The Journal had 468 employees at the end of 2011, A.H. Belo said, down from a reported 709 in August 2008. More than 160 employees worked in the newsroom as of February, Sutton told the paper last month. About 330 Journal staffers belong to the Providence Newspaper Guild or another union, A.H. Belo said.

The Journal has lost advertising at a slightly faster pace than the industry as a whole. Newspaper ad sales declined 48% from 2005 to 2010, according to the Newspaper Association of America, compared with 56% at The Journal. ”Newsonomics” author Ken Doctor said The Journal’s experience is “fairly indicative” of what’s happened at other midsize regional daily papers.

Doctor expressed more concern about the continued decline in The Journal’s digital advertising revenue, which fell 11% last year to $6.8 million. A.H. Belo said the digital losses were caused by “reduced volumes in classified employment, legal, obituaries and in banner advertising.” The Journal started charging digital readers in February.

In an email, Doctor said digital revenue is “the single growth line for the future, and points to a deeper problem. Digital ad growth is going gangbusters, and most dailies are seeing growth there even as print ads continue to decline. What to do: find growth in digital, both in advertising and lowering the paywall to nurture both digital ad and circulation growth.”

Ad sales may fall this year

The Journal’s revenue mix has shifted significantly since the middle of the last decade. Advertising’s share fell from 82% in 2005 to 56% in 2011, while circulation’s share nearly doubled to 36% and printing contracts’ share rose from less than 1% to 9%.

“The company expects newspaper advertising revenues will continue to decrease in 2012, although at a lower rate of decline,” A.H. Belo said in the SEC filing, adding: “The company is proactively positioning its newspapers as a premium product, offering relevant and differentiated local content, and has therefore increased subscription prices in each of its markets.”

The Journal sold an average of 94,357 copies on weekdays last year, down from 163,909 in 2005, A.H. Belo said. Sunday circulation fell to 129,024, down from 231,593 in 2005, a decrease of 44%. Weekday circulation for The Journal’s niche publications averaged 23,938.

Ted Nesi ( tnesi@wpri.com ) covers politics and the economy for WPRI.com and writes the Nesi’s Notes blog. Follow him on Twitter: @tednesi

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9 Responses to “Projo hit by 61% drop in advertising since ’05; digital declining”

  1. Jim Donahue says:

    Print media is dead.

  2. Jake says:

    Have the Journal’s advertising rates dropped commensurately with circulation, or do they have about the same number of advertisers paying lower rates because of lower circulation? I expect it is a combination of both, but wonder when the economic model for the Journal is no longer sustainable. I also suspect that in addition to demographics, the Journal’s editorial policies have contributed to the lost circulation, since they have managed to anger both right and left on various issues.

  3. Mr. fish says:

    Since the the belojo alienates most of RI with its trite reporting and far right ring anti public sector diatribes, it’s no wonder circulation has dropped.

    By the way, play along with game with me: note the stealth columnist named Susan Berge who appears in the lte section nearly every other day. As the Church Lady used to say “coincidence?”

  4. Former Advertiser says:

    This helps validate my decision to stop advertising in the Projo this year. I see that moving its marketing staff to the janitorial staff and outsourcing the work to the Nail advertsing agency has really worked wonders for the Projo. My former Projo advertising sales rep has to be breathing a sigh of relief that he took a buyout.

  5. [...] Internet set off a tsunami for the newspaper industry, with ongoing consequences for the ProJo, as Ted Nesi reports: Advertising sales at The Providence Journal plunged by more than 60% over the last six years, [...]

  6. GuySmily says:

    The Projo helped the decline of the business climate by engaging in news bias in favoring the Democrats in Rhode Island. The Democrats are destroying Rhode Island and have made our state rank dead last for business climate. The Pro Jo reaps what it sews. Because we are now so business unfriendly, the Pro Jo is now fighting to survive. There is a lesson here for media and business case studies everywhere….

  7. [...] the coverage of this story only highlights the importance of saving a paper plagued by plummeting advertising revenue and, too often, a less-than-inspiring response to Digital Age challenges. [...]

  8. [...] From a business perspective, the most worrying part of The Providence Journal’s 2011 results wasn’t the sixth year of falling revenue - unfortunately, that’s almost a given in [...]

  9. [...] less than a year after laying off and buying out Journal staffers. The paper’s work force fell by a third between 2008 and 2011. The Guild signed a new contract in February [...]