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Gannett, New York Times, & Tribune All Report Weak Q1 Results
Gannett, The New York Times, and Tribune all reported weak first quarter numbers in the last few days. In each case, the publishers cited a cooling housing market as the primary reason for the poor results, as real estate classifieds tumbled during the period. While the results are not surprising at all, the anemic performance of the major newspapers reiterates how dependent the dailies are on classified advertising revenue. If just a single classified category, in this case real estate classifieds, falls short of expectations, the economic performance of the entire company becomes jeopardized. All three classified categories (employment, real estate, autos) must perform flawlessly in order for dailies to meet even depressed expectations. It also reaffirms the fact that the dailies have essentially no ability to adjust their inflated pricing structures as better, less costly alternatives (both online and offline) grab market share in the classified space. The papers have painted themselves into a corner and there is little they can do to get out of their predicament. It’s like an animal getting caught in a bear trap – there’s nothing they can do but start gnawing their leg off. They may or may not survive the ordeal, but it’s going to be an excruciatingly long process to watch them attempt to escape.
[tags]Gannett, New York Times, Tribune, Classified Advertising, Real estate Classifieds, Alternative Advertising, Media, Publishing[/tags]