Newspapers Embrace the Internet

Excerpt from our One-Page Annotated News Summary:

Newspaper Web site readership grows 31 pct: study (Reuters)

Summary: According to a Newspaper Association of America study, newspaper web site traffic rose from 42.2 million unique visitors a month for the first half of 2005 to 55.5 million unique visitors for the first half of this year, up almost a third. The number of page views at online newspaper sites rose 52% during the same period. The rise in internet traffic is good news to newspaper publishers who been wrestling with advertisers who want to increase their presence in growing media outlets, such as the Internet. As print readership growth slows (or even declines), newspaper web sites are now driving the growth in readership at the newspapers. Print readership has been declining at The New York Times (NYT), Gannett’s (GCI) USA Today and Tribune’s (TRB) Chicago Tribune and Los Angeles Times. On the flip side, the increase in newspaper web site traffic is concentrated among younger readers. For example, www.washingtonpost.com (WPO) saw more than a 60% increase in readership among 25-34 year olds.
Related links: Full article . Barron's Buries the Lede on Newspaper Stocks • Gannett Co. Inc. -- They're Buying and So Am I • McClatchy Co. - A Solid Past and a Vision for the Future • Is the Newspaper Industry's Crying Just Crocodile Tears? • Dow Jones' Profit Beats Consensus, Online Ads Grow 23% • Gannett Discusses its Online Business. Earnings Conference Call Transcripts: Dow Jones & Co. Q2 2006 • The New York Times Q2 2006 • Journal Communications Q2 2006 • The McClatchy Company Q2 2006 • Tribune Company Q2 2006 • Gannett Co. Q2 2006
Potentially impacted stocks and ETFs: Journal Communications (JRN), Knight-Ridder (KRI), News Corp. (NWS)

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[James Marsh:]

investors should be watching free cash flow growth at newspapers, not clicks or page views. one will quickly realize that despite all the promise of the internet, profits here cannot hope to offset the declining profits elsewhere in the newspaper model. even worse many of the newspapers' new foes online are bringing competition to business segments where the was once none, eroding once high margin businesses (think classfieds). the average newspaper company is only generating 5% or its revenues from the web, yet that have been talking about it since 1997! meanwhile the stocks have gone nowhere over that same period of time. why believe newspaper management now?

2006 Oct 04 09:14 AM