Bacon's Rebellion

Democracy Thrives in Sunlight

Who Will Gather the News? WaPo Profits Take Another Hit

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by

James A. Bacon
in

Profits at the Washington Post newspaper operation plunged in the 2nd quarter of 2007, led by a 13 percent decline in print advertising revenues, according to the Washington Post Company’s most recent quarterly report. Revenue declines were particularly brutal in classified ads and in all types of real estate advertising.

Meanwhile circulation of the print newspaper continues to erode, losing another 2.9 percent over the past year. That’s all the more extraordinary when you consider that the Washington metro area is one of the fastest-growing big metros in the country.

The only good news in the newspaper publishing division was the performance of the online operation: 2Q revenues increased 11 percent to $28.2 million. The fast-growing online business is generating in excess of $100 million a year in revenue now. Thanks to the strength of the online operation, newspaper publishing division revenues declined only seven percent overall.

But online isn’t growing enough to salvage profits. In the 2Q of 2006, before taking into account a $46.8 million retirement plan buyout, the newspaper division generated $29.4 million in profits. This year, quarterly profits were only $17.8 million. (The year-to-date numbers, encompassing two quarters, aren’t looking any better.)

At some point, plummeting revenues and profits will force the WaPo to engage in another round of editorial cost cutting.

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11 responses to “Who Will Gather the News? WaPo Profits Take Another Hit”

  1. Larry Gross Avatar
    Larry Gross

    …”…But online isn’t growing enough to salvage profits.”

    gee.. apparently no none informed GOGGLE of this problem…

    🙂

  2. AnonymousIsAWoman Avatar
    AnonymousIsAWoman

    You know, this really is problematic. As much as I complain about the WaPo’s coverage, which I sometimes think is slanted, they are never overtly dishonest. They normally get stories right and their investigative journalism is usually careful and professional.

    For all that bloggers criticize the mainstream media, they are frequently our main sources for our stories too.

    The blogosphere has a real role to play in enhancing and complementing newspapers and (at the risk of sounding arrogant) keeping their coverage more honest. But we will never replace them for solid, accurate research.

    A democracy cannot thrive without an independent media to disseminate information.

    Yet, as a business model, I can see why advertisers, especially classifieds, are going on line more and more.

    I admit I’m stumped for a solution to the print media’s declining profits because I’m not a business person. But this is troubling to all those who care about a healthy democracy.

  3. Single Avatar
    Single

    Two things that I see – I’m from a generation that did like to have printed word on paper; the newer generations seem to prefer screens to paper.

    Second – I quit subscribing to the local rag around here because they no longer are a newspaper in the strict sense. No news reports are reported with all sorts of bias attached. “Conservative Senator so-and-so …” Not only do you rarely (if ever) see “Liberal Senator …” (which at least would be fair and balanced) but almost all the stories have a huge, liberal bias to them. Give me the news, the facts and let me decide; you and bloviate all you want to on your editorial page but I would like to see unbiased news reporting. Since it isn’t happening, I don’t subscribe.

  4. Anonymous Avatar
    Anonymous

    When I first moved to Blacksburg, VA in 2002, I could get the WaPo delivered to my door along with the Roanoke Times (RT). In fact my RT “paperboy” also delivered the WaPo. A couple of years later, the WaPo stopped delivering in my neck of the woods. I can go out and buy it daily – which I do on Sundays and occasionally during the week, especially if something I’m interested in is going on. If I can buy it at 7-11, Kroger’s, service stations, etc, why can’t it still be delivered since it piggy-backed onto the RT?

    After spending 35+ years in the DC area, I like a bit more national/political news than I can get in the RT so I subscribe to the WSJ, which piggy-backs onto the RT for delivery, just as the WaPo used to.

    I like to read the Richmond T-D when the G-A is in session – best coverage you can get on the G-A IMHO. Lo and behold, recently I was told that the R T-D was no longer sold this far west. Huh?

    Declining readership? No surprise here since the area of service is declining.

    I worked for the WaPo for about 5 years in the mid-70’s. Sad to see what’s happening but it seems to be at least partly self-inflicted.

    Deena Flinchum

  5. Larry Gross Avatar
    Larry Gross

    a couple of observations:

    * – ADVERTISING has not gone away. In fact, it has changed drammatically but it is still around and there are companies that survive quite nicely as long as they adapat their business models to the rapidly evolving advertising world.

    * – All due respect to Jim and other respected bloggers – do we have bloggers (as of yet) that are held in the same high esteem as some of the major reporters on some of the major papers?

    My point is that if someone has a reputation as a top-notch reporter – they are going to still be worth some money to news businesses.

    and yes.. the day might come when bloggers produce their own “stars”.

    Journalism is about content – not about delivery… no?

  6. Anonymous Avatar
    Anonymous

    I don’t understand advertising. I can’t recall a single time, ever, that I bought something simply because of an ad.

    RH

  7. Anonymous Avatar
    Anonymous

    “Journalism is about content – not about delivery… no?”

    Journalism is, indeed, about content; but readership, which determines circulation and through circulation, advertising revenue, is about delivery. If you make it more difficult (WaPo) to read a newspaper daily or impossible (R T-D) to read it at all, readership (circulation) goes down. What factors affect whether a company places advertising in a newspaper more than circulation and the demographic profile of same? Macy’s doesn’t care why people read the WaPo, just that lots of them do.

    I am a part of the age-group that still likes a newspaper. This doesn’t mean I don’t read Wapo, NYT, Google-News on-line. I read the WaPo daily when I could get it delivered. I can get David Broder and others on-line so I rarely buy a daily WaPo unless I happen to be where I can pick it up easily. I still miss my daily paper fix.

    Pulitzer Prizes reward content. Readership, and therefore advertising revenue, reward delivery regardless of why people are reading the paper.

    BTW, when I worked for the WaPo back in the 70’s, Steve Isaacs gave me credit in his stories for the computer analysis I did for his 6 articles dealing with the relationship between where committee hearings were held and whether or not the chairmen were up for re-election. Hardly a “star” but it beat working on payroll programs!

  8. Larry Gross Avatar
    Larry Gross

    I admit it. I like “paper” papers. There is something about being able to scan .. flip pages back and forth… etc..

    and if I’m on a trip.. I always want .. USA Today and the local major paper but then again.. to this point.. most of the campgrounds I have stayed at in years prior don’t dependably have wi-fi… though that is changing fast.

    which.. by the way.. everyone here get’s a 30 day break from my blather… come Tuesday evening, I’ll be enroute to a river in NW Canada.. no computers, no newpapers, no CNN/or FOX .. and of course no polluting of Bacon’s Rebellion.

    I may post a few more times today and early morn but after that ya’ll are on your own.

    I can hear the sighs of relief already.

    🙂

  9. Jim Bacon Avatar
    Jim Bacon

    Hae a good trip, Larry. NW Canada seems to be the really cool place these days. All of a sudden, I know a bunch of people who’ve been there. Everyone says its stunning.

  10. Larry Gross Avatar
    Larry Gross

    thanks!

    Nahanni River for those that want to GOOGLE.

    We’re going through Alberta and Edmonton on our way to Fort Simpson.

    I’ll give a report of the settlement patterns in Edmonton but if you GOOGLE them.. you’ll see the magic phrase “TOD”…

  11. Groveton Avatar
    Groveton

    TOD?

    Try MTH

    Match The Hatch

    If a bear starts clacking its teeth together I am told it’s a good time to run. Either that or try squirting it with the pepper spray from the canister they issue you.

    Have fun.

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