Continued weakness in print ad sales was a key contributor to a 12.6% decline in Postmedia’s first quarter revenues, the Toronto media company announced last week.
Postmedia’s total revenue for the three months ended Nov. 30 was $169.5 million, down from $193.9 million in the corresponding year-earlier period.
Print ad revenue for the quarter was down $23.4 million – or 20% – to $93.1 million, with declines in the automotive, technology and travel sectors accounting for 45% of the overall decline. Traditional run-of-press advertising was down 22% from the year-earlier period, while insert revenue tumbled 13%.
Print circulation revenues also fell $2.2 million, to $47.4 million, on the basis of a 4.3% decline in overall circulation volume.
Digital revenues were a bright spot for Postmedia, however, increasing 3% or $700,000 from the corresponding year-earlier period. Gains in both local digital advertising and digital subscriptions were partly offset by declines in digital classified, the company said.
Chief operating officer Wayne Parrish said the company has seen growth of between 25-30% in both local digital revenues and subscribers following the launch of its “reimagined” four-platform products in Ottawa, Montreal and Calgary, but cautioned analysts that it is still too early to determine their long-term impact.
Asked if Postmedia has pondered eliminating paid digital subscriptions in the wake of Torstar’s recent announcement that it plans to drop the paywall at its flagship Toronto Star product later this year, Parrish said there are no plans to abandon the digital subscription strategy it has pursued since 2011.
“Ours is very much a four-platform strategy,” he said. “It’s not the Holy Grail, but we continue to believe it’s a piece of the overall puzzle you have to work with.” Postmedia currently has more than 140,000 digital subscribers, and Parrish said that number is poised to grow as it continues to roll out its 2.0 “reimagined” strategy in March.
“It’s not the ultimate answer, but it’s a piece of how we’re going to monetize our audiences going forward,” he said.
CEO Paul Godfrey said if approved by the Competition Bureau, the October deal for Sun Media Corporation’s English newspapers would provide the company with additional scale and stability for both publishing groups.
“The addition of the English language Sun newspapers, and perhaps more importantly their associated digital properties, [is] we believe, critical to the future of the Canadian media industry,” he said. “In order to persevere we must have the scale and scope, and of course the time, to be able to compete with the giant foreign owned digital-only companies.”
Godfrey said for the merger to be a success, the Postmedia and Sun assets must be combined in such a way that increases unique visitors and attracts new advertisers.
