Randomly Noted

When you see the botton line numbers at Gannett, you can’t help but think at first that maybe, just maybe, the newspaper industry has struck bottom and is starting to turn around. The company, publisher of  USA Today and other papers, says it earned 56 cents a share in the most recent quarter compared to a loss of $20.65 a share a year ago. But when you drill down, you see revenues declined 14% to $1.5 billion from $1.7 billion. A big chunk of the declines came from advertising, which fell 18% year-over-year. And the hardest hit part of advertising was one that traditionally as the steadiest – classified ad sales were down 22%.

So, once again a company was able to manage its numbers by cutting costs, not because it grew its business. Those of us who practice this craft know its a business that costs a lot to produce the kinds of products we all do. We know the value is there. Hopefully, it doesn’t take a calamity in the news business for the public to understand that value, too.

Call it the triple whammy for newspapers. When the recession hit last year, advertising dollars began to dry up. Papers raised their newsstand prices to counter some of the lost ad revenue. The higher newsstand prices in part are responsible for 11% circulation decline reported by 379 papers for the six months ended September 2009. And of course, lower circulation means that if advertising makes any kind of a comeback, it will be at a lower billing rate because you charge for ads in part based on your circulation.

The big loser among papers was USA Today, which dropped to number two behind the Wall Street Journal (the Randomly Noted blog gang works for Newswires, a sister publication). The WSJ was the only newspaper among the top 25 to show a gain, according to the Audit Bureau of Circulation. Other big losers in the daily newspaper average circulation game: the San Francisco Chronicle lost one out of every four readers (25.82%); the Newark Star-Ledger lost 22.22% and the Dallas Morning News lost 22.16%, according to Editor & Publisher.

Here’s a Chigago Tribune blog item on the circulation figures.