Web 3.0 & Gannett (Part 1)

Introduction

Gannett (GCI) publishes 85 daily newspapers, nearly 1,000 non-daily publications and 23 television stations in the US. In the UK, Gannett publishes 17 daily newspapers and around 300 non-daily publications. Gannett’s popular newspaper USA TODAY with a circulation of 7.3 million is the US’s largest-selling newspaper. USA WEEKEND is a weekly newspaper with a circulation of 2.3 million. The company’s 23 television channels cover approximately 18% of the US and have a market reach of 20.1 million households. Gannett also operates a number of web sites.

Newspaper companies are struggling due to falling advertisement and circulation revenues and Gannett is no exception. In July 2007, Gannett’s newspaper advertising revenues were down 6.1% compared to the same period in 2006. Operating revenues for the period declined 4.3% compared with the same period in 2006. Local advertising revenues of Gannett declined 2.8% in July. National advertising revenues for the seventh period were down 9.1%. At USA TODAY, advertising revenues were 15.9% lower on paid ad pages of 276 versus 334 last year.

Classified revenues were down 8.3% during the period. Real estate revenues were down 11.0%, employment revenues were 7.2% lower and automotive revenues declined 13.3%. Classified results at Newsquest in the UK were significantly better than in the U.S. community newspapers. At U.S. community newspapers, classified revenues declined 13.5% for the seventh period reflecting declines of 19.7% in real estate revenues, 12.4% in employment revenues and 14.8% in automotive revenues.

Broadcasting revenues, which include Captivate, were down 4.6% for July. Television revenues were 5.5% lower in the period as local and national revenues declined 5.4% and 10.9%, respectively. Captivate revenues increased by 45.1%.

I have written at length about the tough market conditions in the newspaper and old media space and how the classifieds have been steadily shifting to the Internet. Here are some of my previous posts on the space.

Newspapers, Wake Up!
Newspapers, Roll Up!
Newspapers Losing Verticals to Online

My suggestion of Newspapers rolling up online properties is vindicated by the fact that the only segment that witnessed growth in the Gannett stable was the online properties. According to Nielsen//Net Ratings, in July 2007, Gannett’s domestic sites had 23.4 million unique visitors reaching approximately 14.5% of the Internet audience. Online revenues during the period increased by 37.3%. Classified online revenues represent about 50% of domestic community newspaper online revenues.

In the UK, Newsquest online audience totaled 5.1 million unique visitors with 76.9 million page impressions. At the CareerBuilder network, revenue growth was up 16% for the quarter and traffic averaged over 22 million.

The Company is executing its strategic business plan and is focused on transforming its business by divesting off some of its non-performing newspapers and investing and growing its Internet properties. Gannett is betting big on digital media. As of May 2007, it publishes 14 websites with more than 27 million page views and 1.1 million unique visitors.

Recently, the Company launched more than 100 local sites, which can be easily accessed by mobile phone users. Now a mobile user can get the breaking news, sports, weather and other must-have local information on his or her phone with the help of mobile Internet browsing. This service would be on 24/7 basis. This move will enable the Company to tap the local advertisers and exploit its knowledge of the local markets.

We will discuss more of Gannett and its online properties in the forthcoming posts.

(To Be Continued)

This segment is part 1 in the series : Web 3.0 & Gannett
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