Flash! The Financial Times of London has just learned about this.
Newspapers are finding their business increasingly challenged as print advertising sales – their traditional revenue powerhouse – decline and readers’ attention shifts to the screen.
Revenues from print ads have dropped 8 per cent a year for the past three years, according to Ken Doctor, analyst at Outsell. Digital advertising on papers’ websites is picking up but brings in lower revenue than print.
That has left many companies turning to consolidation to trim overhead costs and expand their reach to offer a bigger audience to potential advertisers. Total deal value rose to $259m in the quarter from $125m a year ago.
Tribune Publishing’s Baltimore Sun Media Group and Florida-based Halifax Media Group were among the companies that bought up smaller regional newspapers during the quarter as they looked to widen their footprints.
“At this point there’s likely not going to be a significant uptick in traditional print publishing advertising dollars,” said Bart Spiegel, partner at PwC’s entertainment, media and communications practice. “You need to look at the cost structure of the business. You need scale and to take advantage of synergies to make sure you’re really driving profitability.”
“You need to look at the cost structure of the business. You need scale and to take advantage of synergies to make sure you’re really driving profitability”.
Whenever you hear the word “synergy,” think “two drunks holding each other up.”