Canadian newspapers saw statistically significant decreases in several major revenue categories in 2009 according to a recent report from Statistics Canada.
According to StatsCan, overall revenues for the Canadian newspaper industry fell to $4.9 billion in 2009 from $5.4 billion a year earlier, while pretax profit slipped from 12.3% to 9.9%.
The report said that the hardest-hit regions were Western Canada and Ontario, where pretax profits slipped 6.5% and a negligible 0.3% respectively (revenues in Quebec and the Atlantic Provinces were +0.2% and -0.1% respectively).
The report noted that ad revenues for daily and community newspapers slipped a combined 14% to $3.1 billion in 2009 from $3.6 billion the year before. Dailies were the hardest hit as ad sales dropped 15.5%–to $2.2 billion from $2.6 billion a year earlier. Community papers saw ad sales decrease 10% to $911.6 million.
After accounting for 69.2% of all newspaper revenues in 2007, advertising accounted for 66.1% in 2009 according to the StatsCan report.
Even more worrisome is that revenues earned from distribution services, such as flyers and inserts, fell 6.2% in 2009 after having increased by more than 50% between 2004 and 2008. Revenues generated from custom printing services also dropped 3.1% after what StatsCan characterized as “years of steady growth.”
The StatsCan figures do provide some good news for publishers in the form of circulation revenue, which grew 1.2% to $875.3 million in 2009–largely attributable to a 5.4% increase in newspaper prices.
Elsewhere newspapers continued to trim operating expenses. While salaries, wages and benefits comprised 40% of the industry operating expenses in 2009, labour costs were down 5.1%–primarily because of layoffs attributable to decreasing ad sales.
But a renewed emphasis on fiscal responsibility also led to a 21.4% reduction in spending on advertising, marketing, travel, meals and entertainment costs, which followed a 5.4% decline the previous year.
