Gannett, the largest U.S. newspaper publisher, increased its quarterly revenues for the first time since 2006. Net operating revenue totaled $1.52 billion in the third quarter of fiscal 2012,, vs. $1.39 billion in the 2011 quarter. 2011 ‘s third quarter had one week less than 2012’s.
Quarterly operating revenue for the publishing unit – the company’s largest business segment – rose 3.7% to $1.04 billion. Higher circulation revenue – up 16.8% – stemming from the rollout of the “all access content subscription model” helped offset a decline in advertising revenue. Advertising revenue fell to $657.5 million from $670.7 million in the fourth quarter a year earlier. Benefiting from higher political ad spending, the broadcasting unit’s operating revenue jumped 43.9% to $287.5 million in the quarter. Television revenue totaled $280.2 million, a 45.7% increase.
Net operating revenues from print circulation were up 5.6 percent in the third quarter of fiscal 2012 over the same period of the year before, Gannett announced. Digital advertising was up 4.7 percent, “due primarily to revenue growth at CareerBuilder,” the earnings report says.
Success with Paywalls
Seventy-one of Gannett’s newspapers now have a paywall. The gains in digital subscriptions nearly offset the decline in print advertising, which was down 6.6 percent. Digital “now represents more than 25 percent of total revenues,” CEO Gracia Martore said in a statement accompanying the earnings release. At USA Today, digital revenue was up 69.7 percent; and unique visitors to USA Today’s mobile sites were up 79 percent in September. Overall, net operating revenues from publishing were down 3 percent.
“The impact of the all access content subscription model as well as an increase in digital advertising and marketing solutions resulted in a 64.6 percent increase in digital publishing revenues,” the company’s release says. “Digital revenues at our local domestic publishing operations were 76.0 percent higher due primarily to the all access content subscription model.”
In February 2012 Gannett announced a plan to install paywalls at all its newspapers except USA Today. CEO Martore said in a conference call with analysts that the company remains on track for its promise that the initiatives will increase circulation revenues 25 percent and add $100 million of operating profit by the time they have all been in place for a year at the end of 2013.