Wednesday, April 21, 2010

Media General reports Q1 earnings: more print declines, losses narrow as costs are cut, broadcast gains

By now we pretty much know what the media landscape is going to look like in 2010: improving revenue performance for broadcast and electronic advertising; continued, but slowing declines in ad revenue for newspaper advertising; and improvements in profits due to cost containment.
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Media General was the latest to report Q1 earnings and their numbers are right in line with those that have previously reported (see post on Lee Enterprises and Journal Communications). Media General, owner of 23 newspapers and 18 television stations, reported a quarterly loss of $16.8 million, versus a loss of $21.3 million, in the same quarter of 2009. Broadcast revenue increased a little over 12 percent thanks to advertising surrounding the Olympics, but print revenue declined 9.4 percent. Like other newspaper publishers, Media General preferred to see the bright side -- print declines are moderating -- but these were still declines over 2009 numbers.

Clearly the economy is very slowly improving the picture for advertising. But advertisers are not flocking back to old media marketing solutions. Some have blamed the recession for poor print performance, others the Internet -- but it has been the combination of recession and media transformation that is killing print advertising. Those with diversified portfolios will recover quicker, as will those that have previously invested in mobile and other electronic mediums. Other media firms, though, who held back investments in the name of cost control, are now faced with having to hope for a print renaissance -- or, like RBI, are getting out of the game.