It's earnings season on Wall Street, which means we're finding out just how bad the first quarter of 2009 was for newspaper publishers and other media companies.
It was bad. Very bad.
No surprise there, though the numbers are nonetheless staggering. Advertising revenue at industry bellwether Gannett plummeted 34 percent in the first quarter from a year earlier. That's a big hit—unless you compare it to Gannett's classifieds revenue, which dropped a whopping 46.5 percent. Wow.
Analysts are expecting similar drops as other companies report their quarterly numbers over the next few days; The New York Times described the industry's ad revenue decline this week as "the sharpest drop in generations." And it's not just newspapers: Folio magazine reports that ad pages in consumer magazines declined 25.9 percent in the first quarter.
Pick up just about any newspaper or magazine and you can see this: They're painfully thin. Last Saturday's national edition of The New York Times had exactly six ads in its A section—all crowded onto A2 and A3, with plenty of room left over for the paper's index. There were no other paid ads in the A section, and none in the Business/Sports section. The only bright spot was the usual collection of movie and Broadway show ads in the Arts section—and even that was sparse. (Update 4/21: The Times Co. reported a 28.4 percent drop in first-quarter ad revenue, far beyond expectations.)
This isn't exactly news, of course. The past few months has been described as a "hundred-year flood" for the publishing business. The flood is cresting now, and the damage in its wake is catastrophic.
Does it get better from here? Look around you. The economy is still struggling, retail sales are spotty, unemployment is still high, banks are still moribund, real estate is still depressed, automakers are still in trouble. That portends that the second quarter and even the rest of the year could be as bad as the first. That means that the rash of cutbacks, shutdowns and other bad news will continue.
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