Gannett gains on digital content subscription model
24 April 2013
McLean, Virginia-based Gannett Co Inc, which started charging digital subscription fees for its newspapers' websites last year, saw earnings increase nearly 54 per cent in the January-March 2013 quarter from the year-ago quarter, benefiting largely from its all access content subscription model.
Gannett Company Inc is a publicly traded media holding company with assets that include the national newspaper USA Today and the weekly USA Weekend.
The company also owns 23 television stations through Gannett Broadcasting Inc and is the largest group owner of NBC-affiliated stations.
Its digital media properties include PointRoll, BNQT Media Group, Planet Discover, Ripple6 and ShopLocal through Gannett Digital.
The company posted company-wide revenue of $1.24 billion in the first quarter, up 1.6 per cent from a year earlier. Net income stood at $104.6 million, or 44 cents per share, as against $86 million, or 28 cents per share.
Overall advertising revenue in the company's publishing division was down 4.5 per cent from a year ago. However, digital publishing revenue rose over 75 per cent.
Gannett also gained from higher advertising sales at its television station. Broadcast revenue rose 8.7 per cent.
The adjusted quarterly earnings stood at 37 cents a share, rising 8.8 per cent year-over-year.
According to Gannett, total broadcasting revenues, including captivate, were up 8.7 per cent to $191.6 million, perked up by robust growth in retransmission revenues and increased core advertising revenues.
Television revenues rose 8.5 per cent to $185.5 million. Management had earlier stated that television revenues for first-quarter 2013 would be negatively impacted by the absence of political revenues and the shift of the Super Bowl to CBS Corporation (CBS) from NBC.
However, a significant increase of 58.7 per cent in retransmission revenues more than made up advertising revenues. Broadcasting operating income rose 15.2 per cent to $87.3 million.
Digital revenues were up 3.9 per cent to $174.9 million while digital segments' operating income came in at $23.6 million, up 45.1 per cent year-over-year.
Company-wide total digital revenues were up 28.6 per cent at $350.3 million, on revenue gains at digital advertising and marketing solutions as also sustained rollout of the all-access content subscription model.
Classified advertising at domestic publishing operations declined 5.4 per cent during the quarter under review.
Advertising, which continues to be a significant source of revenue for the company, is dependent on the global financial health. Gannett was taking initiatives for the diversification of its business model, thereby shielding itself against any economic onslaught with the addition of new revenue streams.
The company had also undertaken adaptation to the changing face of the multi-platform media universe, which currently included internet, mobile, social media networks and outdoor video advertising in its portfolio.