By: Jennifer Saba Online revenue continues to contribute more to newspapers? bottom line. For Q1 this year, growth in online revenue accounted for a median 100% of growth up from 35% for the full year 2005 and 23% in 2004, according to a report from Banc of America Securities.
Online revenue increased 30% in Q1 compared with a 2% gain for print and online combined. In Banc of America?s coverage universe, Dow Jones has the slowest year over year growth for Q1 in online revenue (which includes online circulation revenue) at 15%, while E.W. Scripps posted the most, up 82%.
Lee Enterprises? online revenue contributed the most to gains made in the quarter (63%) while at Dow Jones it made up the least (13%).
That?s good news for newspapers especially since the research firm points out that newsprint expense is going up. Analysts estimate that a $50 per ton increase in newsprint will put pressure on earnings reducing them by 4.3%.
Dow Jones had the highest increase in newsprint expense in Q1, up 24.7% -- on a 15.1% price increase -- while newsprint consumption grew at the company 8.4% (due to the Weekend Edition). Scripps came next, with a 12.8% increase in newsprint expense on a 14% price increase; consumption declined 1.2%.
Overall, Banc of America expects that this year, publishers will continue to be exposed to a shaky advertising environment with low single digit ad increases and limited earnings upside.
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