Is consumer publishing the millstone around media company necks? It certainly looks that way for two cross-Atlantic giants of media, Gannet and Daily Mail and General Trust.

The latest financials from both firms show poor performance in consumer arms counteracting healthy growth in other parts of the business – and that has a lot to do with the ad market.

DMGT: B2B growth met with consumer fall

For the last three months of 2012 (release, PDF), DMGT’s total revenues from B2B media were up 12 percent due to especially strong performance at the DMG Events and DMG Information divisions. 

But despite that, company-wide revenues were up just two percent in the quarter to £503 million, thanks to a seven percent fall in consumer revenue.

Digital adspend on newspaper companion sites was up 51 percent year-on-year, primarily down to Mail Online – which saw a record 127 million unique browsers in January. But that wasn’t enough to offset declines from print ad and circulation revenue.

At regional newspaper arm Northcliffe Media the picture was especially bleak. Total revenue was down eight percent year-on-year to £49 million. Ad revenue was worst hit, down nine percent in the quarter , however, circulation was also down four percent.

Fortunately, DMGT has since sold off Northcliffe to the new Local World consortium, and though it retains a 38.7 percent stake in the business, the move should help soften the impact of regional media’s decline.

However, even without Northcliffe to worry about, DMGT’s consumer business is still facing a tough time competing for ad revenue and circulation is in decline – leading us to ponder recently whether the time is right for it to become an entirely B2B-based publisher.

DMGT’s B2B juggernaut Euromoney is also suffering declining ad revenue, but like other parts of DMGT’s B2B business, has a wider range of renewable revenue streams to draw on to counteract weakness in the ad market. 


Gannett: TV boosts revenue, but publishing still weak

Gannett posted a 9.4 percent year-on-year revenue boost in the last three months of 2012, hitting $1.51 billion (£968 million). However, net income was down 11.8 percent to $103 million (£66 million) (Release).

Gannett’s broadcast arm posted by far the most impressive performance, with revenues during the quarter rising 44 percent year-on-year to $288 million (£184 million). Over the full year, broadcast revenues were up a quarter to $906 million (£578 million).

But again it was the firm’s primarily printed-based consumer publishing operation spoiling the party. Total publishing ad revenues were down 2 percent year-on-year in the quarter to $657 million. Circulation revenues were up almost 17 percent to $313 million, but only account for around a third of Gannett’s revenues from publishing.

And it’s not like it isn’t innovating: Gannett’s digital gains are impressive with online revenues up 87.1 percent in the quarter. The company’s investment in paywalls has meant a 100 percent in digital revenues at its local newspaper division.

At its UK arm Newsquest, online revenues were up 8.8 percent. But it’s not enough. Total ad revenue at Newsquest was down 5.3 percent in the quarter. Its classified real estate revenues were especially badly hit, down 9.1 percent compared to the same quarter a year earlier.


For both DMGT and Gannett, print-based publishing held back their overall performance. Yet the markets reacted far more favourably to DMGT’s figures (up almost four percent this morning) than Gannet’s (down more than five percent following the results). Why?

Well it might have something to do with how reliant they are on cyclically and structurally challenged revenue models. Consumer publishing makes up only around half of DMGT’s total revenues, and a lot less of its profits. In comparison Gannett’s consumer publishing arm accounts for closer to 65 percent of the overall business.

Which would you invest in?