The Providence Journal’s advertising revenue slid 15% during the first three months of 2011, marking the 13th consecutive quarter of double-digit ad declines at the paper as its recovery lagged behind those of its two sister publications.
The Journal sold $12.4 million worth of advertising from Jan. 1 to March 31, down from $14.6 million during the same period in 2010, parent company A.H. Belo disclosed in an SEC filing this week.
The Journal experienced “declines in substantially all categories” of advertising during the first quarter, with classified ads down 20%, display and digital ads off 15% each, and preprints down 9% compared with 2010, A.H. Belo said.
Advertising revenue at both the Projo and its sister paper The Press Enterprise was “a bit softer” from January through April “than we had anticipated going into the year,” David Gross, A.H. Belo’s vice president of investor relations, told investors Tuesday.
“We responded to the softness with real-time adjustments to expenses,” Chief Financial Officer Alison Engel said. “We eliminated positions, delayed or froze open positions, reduced some marketing expense and reduced other discretionary expenses.”
If the present advertising trends continue, Gross added, “we will make additional expense adjustments in order to keep our operating cost properly aligned with our revenue.”
The Journal’s net operating revenue totaled $22 million in the first quarter of 2011, down about $2 million from a year earlier. Circulation revenue fell 5% to $8.1 million, while printing and distribution revenue rose 7% to $1.5 million.
Bright spots for The Journal included increases in automotive classified ads, preprinted mail revenue and outside printing and distribution contracts for other papers. Its revenue mix has shifted significantly in recent years, with advertising now making up only 56% of the total and circulation’s share up to 37%.
CEO Robert Decherd said The Journal’s is struggling more than A.H. Belo’s other two papers, which both appear to have hit bottom. “We’re still feeling a downdraft, a significant downdraft, in Providence,” he said. “But we’ve managed through that previously in Dallas and Riverside.”
Engel said the Morning News is currently contributing about 90% of A.H. Belo’s operating profit.
Decherd and other executives expressed optimism about the future, highlighting investments in technology and the company’s strong financial position. ”During this transition, we must reinvest in our print franchises, which generate most of our revenue today, and be ever mindful of opportunities in the digital space,” he said.
Decherd pointed out that A.H. Belo had less than $7 million of cash and cash equivalents on hand and had borrowed $13 million from its creditors during the first quarter of 2009; as of this year’s first quarter, it had a $52 million cash stockpile and no debt.
Gross cited Rhode Island’s meager population growth as one reason for the paper’s declining circulation. He also expressed optimism about Projo Express, a condensed publication The Journal launched last year.
Gross hinted that the online paywall The Journal is scheduled to unveil in the second half of this year will look much like the new one at the Dallas Morning News, saying that its rollout “would not have been possible without the investment that we have made and that we continue to make in common technology platforms.”
Dallas Morning News publisher Jim Moroney described a favorite feature on his paper’s new iPad app. Audience metrics show tablet use peaks between 7 and 11 p.m., so the paper has added a tab to its drop-down menu that says “The Big Story,” which is updated with a collection of content relating to a topic in the headlines – the death of Osama bin Laden, for example – by the time iPad users switch their machines on in the evening.
Moroney said the click-through rate for iPad advertisements is “much greater” than on regular websites, which has pleased the Morning News’ advertisers.
Moroney also expressed particular optimism about The Journal’s future because of its “deep” relationship with local readers in Rhode Island. ”It goes back a long way and we have therefore a brand – not a word that a lot of people in the journalism world like to use – but our brand is a powerful asset and it helps us online,” he said.
May 6th, 2013 at 9:53 am by Ted Nesi under Nesi's Notes, On the Main Site
The Providence Journal’s advertising sales dropped again during the first three months of this year, as Rhode Island’s statewide daily newspaper reported losses in nearly every type of notice.
