June 24, 2024

Media Decoder: McClatchy Mulls Digital Products

The newspaper industry continues to take a major hit as reflected by earnings reported on Tuesday by The McClatchy Company, the parent company to newspapers like The Kansas City Star, The Miami Herald and El Nuevo Herald. The latter publications were nominated for a Pulitzer Prize for breaking news for their coverage of the Haiti earthquake this year.

The company reported a net loss of $2 million and a revenue decrease of 9.5 percent to $303.7 million from January to March. Advertising and circulation revenue were down with total ad revenue decreasing 11 percent to $225 million and circulation revenue dipping 5 percent to $66 million. Two bright spots were in digital advertising revenue, which was up 2.2 percent in the same quarter and in direct marketing which had increased 7.1 percent in the quarter.

“Importantly, our digital-only advertising (digital advertising not sold as a part of a bundled sale with print) increased 10.2 percent in the first quarter of 2011 compared to 2010. Total digital advertising represented 20.1 percent of our advertising revenue in the first quarter, up from 17.5 percent in the first quarter of 2010,” said Gary Pruitt, the company’s chairman and chief executive officer, in a statement.

With the exception of the automotive sector, combined advertising revenue for digital and print decreased in all sectors including retail, classified and real estate. National advertising decreased 29.3 percent with the hardest hit states being California and Florida with a decline of 14.5 percent in newspaper advertising revenue combined.

Operating expenses decreased across all areas except newsprint and supplements.

In a news conference on Tuesday Mr. Pruitt said the company planned a number of digital product offerings for the coming year including a daily deal coupon site. Mr. Pruitt also said the company was increasing its digital sales force and would be experimenting with paid digital products like mobile applications and Web sites with specialized content.

The company also plans to experiment with a digital subscription model on one of its mid-size newspapers, similar to the model The New York Times announced in March. “We’re going to keep participating in the digital mix,” Mr. Pruitt said adding that while paid products were important to the company’s overall strategy “Ad revenue will be the lion’s share of our digital revenue from now on into the future. We’re comfortable with that.”

Article source: http://feeds.nytimes.com/click.phdo?i=0e711b26413dd5522577890ebc6e420a