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WaPo Suffers Major Earnings Decrease as Newspaper Industry Struggles

WaPo Suffers Major Earnings Decrease as Newspaper Industry Struggles

The Koch Brothers are the least of the MSM’s problems

Politico reported Friday that the Washington Post suffered an 85% earnings drop in comparison with the company’s first quarter of last year.

The Washington Post Co. on Friday reported bad news for its newspaper division, with revenue totaling $127.3 million for the first quarter of this year — down four percent from 2012 — and an operating loss of $34.5 million.

Overall, the company posted a profit of just $4.7 million, an 85 percent drop in earnings from the net income of $31 million for the first quarter of last year.

In the newspaper division, daily and Sunday circulation at the Post dropped 7.2 and 7.7 percent, respectively, compared to 2012. Average daily circulation totaled 457,100 copies, with Sundays at 659,500. The report also noted that in January of this year, the Post increased the paper’s price for daily home delivery and daily and Sunday single copies. And print advertising revenue at the Post in the first quarter of 2013 dropped 8 percent to $48.6 million, down from $52.7 million in the first quarter of 2012.

The Washington Post isn’t alone.  The Newspaper Association of America recently released its American Newspaper Media Industry Revenue Profile 2012 report, which indicated that total revenue for U.S. newspapers declined by 2% in 2012.  And that’s a number that likely would have been worse without the publications’ efforts of online coverage and advertising.

It’s the picture of an industry that has continued to struggle, as was highlighted in last year’s list of the Top 10 Newspapers in Trouble at RealClear Politics.

Here are just a few highlights from publications grappling with similar issues in recent months:

  • The NY Times recently reported a drop in its profits: “In the first quarter, net income was $3.1 million, or 2 cents a share, down from $42.1 million, or 28 cents a share, in the period a year earlier.”
  • The Times Picayune announced last year that it would be changing its seven day a week print publication to a three day schedule, based in part on falling print advertising revenues.
  • Newsweek also shuttered its print version this past December, opting for an all-digital format. According to CNN, “Newsweek’s print advertising has been in a steep, steady decline in recent years, plunging by $334 million, or 70%, between 2007 and 2011.”
  • The Journal Register, parent to a host of local newspapers, filed for bankruptcy last year after struggling with its print-dependent advertising model: “from 2009 to 2011 Journal Register Company’s print advertising revenue declined 19% and print advertising represents more than half of the of the Company’s revenues.”

As Politico also reported, the Washington Post’s online revenue increased by 8% for the first quarter of 2013 in comparison with that period in 2012.  The information highlights the struggles of an industry that has been shifting much of its focus toward digital publishing and online advertising in an effort to fend off decreasing revenue numbers in its print publications.  Yet, the list of defunct newspapers in the US still continues to grow.

One thing that is not mentioned as often in the analysis of the state of the newspaper industry is the content itself. But it’s an issue that has certainly come up in coverage of potential buyers of publications.

Koch Industries has expressed interest in purchasing Tribune Company’s newspapers, which include the Chicago Tribune and the LA Times.  It’s a move that many on the left have very vocally decried and threatened would cause half the LA Times staff to quit.

The Newspaper Guild and Communication Workers of America even issued a press release on the matter, calling upon the Tribune to “make a pledge that they’ll only sell to a buyer that will protect the objectivity of the news product by making a public commitment to doing so.”

Considering the current state of “objectivity” of most newspapers today, many of which lean far more left than are willing to acknowledge, perhaps their print versus online business model isn’t the entirety of the problem.  Most consumers of news are looking for facts and are often alienated by news that comes pre-packaged from a particular slant. True objectivity might actually attract more readers from the largest base of the country.

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Comments

There will always be a market for news, but it’s going paperless.

Maybe WaPo should get back in the news business.

    myiq2xu in reply to myiq2xu. | May 5, 2013 at 6:27 pm

    It’s a move that many on the left have very vocally decried and threatened would cause half the LA Times staff to quit.

    That would certainly reduce overhead.

casualobserver | May 5, 2013 at 6:34 pm

I get a certain amount of pleasure from watching so may newspapers and other news-media outlets like CNN and MSNBC prove that their ideology is more important than business success. Of course, they would call it ‘principles’…

The only thing I can watch even now on CNN is the show headed by Jake Tapper (by recording it). But he hasn’t yet made the transition to being in front of a camera for a solid hour, instead of for a quick report. He can be monotonous and seems to tire at times. I’ll give him more time.

It’s even more sad for CNN when you realize their other, lower production value network, HLN, gets more of the key demographic eyeballs often.

There will always be a market for news, this is true.

But what are people buying when they buy news?

Editorial oversight. Not the “just-the-facts” type, but they’re looking for an editor who will be able to select from the available news stories to present a narrative that resonates with the buyer. This is why Drudge, LI, and Ace of Spades are so disproportionately successful and influential.

In this regard, the lefty news outlets are doing the right thing by culling all the normal news in favor of the tiny sliver that advances the leftist agenda.

The things that make it so silly is 1) they are attempting to compete in an overcrowded market. 15% of the country us Chris Matthews’ mom is not the market share to be chasing, guys; and 2) they won’t admit their biases.

    casualobserver in reply to Scott Anderson. | May 5, 2013 at 7:02 pm

    Some I know who are not turned off by the liberal slant still have stepped back from many traditional news sources because of what I call the “MSNBC” effect. The NYT is a good example, where here in the NE they were at one time THE paper to have on your doorstep. However, many readers got tired of essays that were thousands of words, across many pages, that really were more opinion pieces and much less informative or laden with facts. This is easily replaced by blogs of whichever stripe you like. Many papers still provide some articles of straight facts, especially the NYT, but there it can be too much work to weed through the rest. Sites that operate like Drudge fill the gap.

      One reason why I don’t believe that major newspaper revenue will ever go to zero is that, as the cultural forces of regular America begin to squeeze into the formerly “safe districts” of leftist-elitist culture, those who subscribe to the religion of the left hold ever tighter to the fetishes of their religion.

      Just as staying willfully ignorant on the topic of guns is an ecclesiastical-cultural signifier of The Tribe of leftism, so is the possession and (to a lesser extent) the reading of a reliably leftist newspaper.

      And make no mistake, it is a religion, leftism. The expansionist and exclusionary similarities between leftism and islamism are striking.

      You can no more expect the leftist to give up his newspaper as you can expect the muslim to not murder you if they think they can get away with it.

        casualobserver in reply to Scott Anderson. | May 5, 2013 at 11:54 pm

        You might be right to a degree. The only counter example that comes immediately to mind is the steadily declining subscription rate of the NYT. Even the paywall participation doesn’t offset it in total. And there is no shortage of ‘religiously’ leftist people in just the city and boroughs, much less in the region or nation as a whole. It may be that the national participation/subscriptions has shrunk while the local has remained constant or grown. The details aren’t interesting enough for me to investigate.

Newspaper problems can be traced to QE: qualitative easing

Rats! My local “newspaper” is not listed among the Top 10 in trouble.

Thank Craig’s List for the advertising revenue drop and nothing pleases more than financial woes for the MSM.

So most newspapers have basically a monopoly in their respective markets and still can’t turn a profit. They have no idea how to run a business.

And we thought they didn’t know anything about government.

WaPo’s circulation decline last year was 7.8%, so by their standards of reporting on Obama’s economic performance, Happy Days Are Here Again!

Big operating losses again, declining revenue, it doesn’t take Warren Buffett to figure out the only hope is more layoffs. They should start with Milbank, who could replace Carney as Obama’s Press Sec, and wouldn’t need the footstool at the podium.

I spent time in the newspaper business and for a long time was saddened by bad news for any paper. But that was before most of them gave up on news reporting in favor of straight propagandizing for the left. Now I dance naked around the bonfire of their forgotten dreams and urinate on the ashes of their existence.

But I’m not bitter or anything . . .

I suspect they want a bailout. There was a trial balloon or two to that effect during Obama’s honeymoon period. To some extent they probably believe their propaganda about him, but they probably also were hoping for a quid pro quo.

Reality couldn’t happen to a nicer bunch of guys.

    They will get their bailout. I expect a Gang of X style group ramming through that legislation– and don’t count out the possibility that a Republican president would sign it, either.

When people grow up, they stop buying comic books. The likes of the Washington Post et al should have realized that and got out of the absurd fiction business while they could.

There will always be a market for a good newspaper — people like holding them and will pay for that experience. The fiction they won’t is being foisted by the same propaganda rags going broke for allowing themselves to become irrelevant.

    casualobserver in reply to TheFineReport.com. | May 5, 2013 at 10:04 pm

    I think that will not be true soon. There is already a generation that is used to, and in fact prefers to read on a screen. I’m clearly not of that generation, but I still enjoy reading periodicals and even books on my Nook. Even in bed!

    Estragon in reply to TheFineReport.com. | May 6, 2013 at 1:36 am

    The generation with the newspaper habit is dying out.

    Newspaper circulation as a percentage of households peaked in 1975. Coincidentally, so did adult literacy rates in the US. 18 months later, Jimmy Carter rewarded the teachers’ unions for making him President by creating the Department of Education and drastically increasing federal influence on public schools. Newspaper circulation, adult literacy, and K-12 education have all been on a steady downward spiral ever since.

Tell the WaPo to have a Koch and a smile.

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