Revenue at the country’s third-largest newspaper publishing group (after Gannett and Tribune) declined 8% year over year in Q2, excluding the effects of an asset sale. The company attributed the decline to the housing slump, which was no doubt a factor. Another factor, no doubt, was the whirlpool of advertising dollars being sucked into the online publishing companies in McClatchy’s California back yard.
The newspaper industry argues that the current fall-off in real-estate ads is cyclical, not secular, but the folks who actually buy the ads usually disagree. For example, a recent Bloomberg story (via Paul Kedrosky) quotes the president of Esslinger-Wooten-Maxwell Realtors Inc. in Miami, as saying he has cut newspaper advertising by 29 per cent this year, faster than a 9 per cent drop in overall marketing. Shuffield puts a fork in the newspaper industry’s argument and sums up the real problem, one that is far more devastating than a cyclical real-estate downturn:
“If the market turned up, I wouldn’t give the same percentage to print,” Shuffield said. “You don’t want to advertise on a stone tablet if everyone has moved on to the Gutenberg press.”
A lot more details from Bloomberg’s Tim Mullaney…
Really, it’s just temporary.