Newspaper group Trinity Mirror is struggling with the rapidly declining print advertising market, according to a trading update released on Friday.
The group, which publishes the Daily Mirror and People newspapers in the UK, said it expects a 9% fall in revenues in the first half of the year, with print income down 12% but digital up 5%. The biggest fall was in print advertising revenue, which plummeted 21%. Trinity Mirror’s digital performance was much stronger, with digital display and transactional revenue jumping 18%.
CEO Simon Fox said in the statement: “The trading environment for print in the first half remained volatile but we remain on course to meet our expectations for the year.
“I anticipate that the second half will show improving revenue momentum as we benefit from initiatives implemented during the first half of the year.”
Trinity Mirror’s story — that print advertising is declining but digital revenue is growing — is a familiar one. Rupert Murdoch’s News Group Newspapers, which owns The Sun, The Times, and Sun on Sunday, reported losses of more than £60 million last year due to sharp falls in print advertising revenue, as well as redundancy costs and costs related to alleged phone hacking.
The Wall Street Journal predicted in October that the global spend for 2016 on print advertising would decline by 8.7%, the biggest drop since the recession in 2009. In response to the challenging market, the Journal is scaling back print editions of the paper outside the United States. It will reportedly no longer be available in Europe.
The difficulty in attracting print advertising has been made worse by falling sales: even The Sun, the UK’s most popular newspaper, reported a year on year decline of 8% in sales in January. At the same time, newspapers must compete with tech giants like Facebook, Snapchat and Google for digital revenue.
Trinity Mirror also announced on Friday that it is having to find an additional £7.5 million to settle costs relating to the phone hacking scandal.
Although Trinity Mirror reported that 80% of the civil claims relating to the phone hacking scandal had been settled, it said damages and legal fees would cost an additional £7.5 million. The group also confirmed a five-year deal to print and distribute The Guardian and Observer newspapers, taking effect from early 2018.
Business Insider Emails & Alerts
Site highlights each day to your inbox.