This post is by Peter Kafka from MediaMemo
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Last week, the New York Times (NYT) offered investors some cheer with an earnings report that indicated that its ad sales slump may have slowed. No such luck from the Washington Post Co. (WPO), whose flagship newspaper saw ad sales worsen over the last quarter.
The publisher said its newspaper revenues dropped 20 percent in the third quarter, and ad print ads dropped by 28 percent; both those numbers are worse than Q2, which saw revenues drop by 14 percent and print ads drop 20 percent.
No relief from Web ads, either: Internet revenue dropped 18 percent, a decline from the 9 percent drop in Q2. And online display ads, which had been more or less flat for the last few quarters, fell off a cliff, dropping 14 percent.
Don’t be duped by headlines reporting a drop in the newspaper division’s losses, by the way. That’s due to one-time accounting charges the previous year. If you look at operating revenue and expenses via a less formal, but more practical lens, the results are very unpleasant — losses increased by 55% (click to enlarge):
Want more bad news? OK: The company’s magazine group says revenues dropped 33 percent, driven by a staggering 48 percent drop in ad sales at Newsweek.
If you’re at, say, Time Warner’s Time Inc. (TWX) and want to whistle past the graveyard, you can try blaming the drop on the title’s unsuccessful overhaul. But I find it hard to believe that Newsweek’s woes don’t reflect a larger magazine malaise. We’ll see next week.
The good news, as always: The big difference between the Post and many other publishers is that its parent company doesn’t depend on print media. The company’ core education business, which is what has sustained it for many years, continues to do well.