McClatchy: Ad Rev, Circ Rev Down In Q4
McClatchy Co. today reported a net loss in the fourth quarter of 2012 of $30 million or 35 cents per share, including a $60 million after-tax loss on debt refinancing. But the company saw reasons for optimism in its digital efforts.
Revenue for the quarter was $355.7 million, flat compared with the same quarter a year ago. On a 13-week basis, fourth-quarter total revenue was an estimated $333 million, down 5.3% compared to fourth quarter 2011, with advertising revenue of approximately $253.9 million (down 6.3%). Total digital advertising revenue was up 3.5% for the quarter, with digital-only advertising revenue up 14.9% from the 2011 quarter. Digital advertising represented 20.2% of total advertising revenue in the fourth quarter of 2012 compared to 18.5% in the fourth quarter of 2011.
Circulation volume fell during the quarter, down 4.3% daily and down 3.9% for Sundays. Circulation revenue was also down 1.9%.
But Patrick Telemantes, McClatchy’s president and CEO, during Thursday’s earnings call said that the newspaper publisher’s new digital subscription program, dubbed the Plus Program, is expected to drive circulation revenue growth.
Early results were good for McClatchy, which completed the roll out of metered paywalls to all of its papers during the fourth quarter. Telemantes said “a vast majority” of the company’s print subscribers had signed up for the Plus Program, as well as 8,400 new digital-only subscribers. The program generated $1.2 million for the company for 2012, and Telemantes expects revenue from paywalls to exceed $20 million by the end of the year.
There were a few other bright spots for the company.
Traffic to its local sites rose 3.4% during 2012, while mobile traffic increased 95% for the year, the company said.
Telemantes said revenue from McClatchy’s Sunday Select — its preprint ad product that is delivered to houses that don’t subscribe to its newspapers — was up 29.4% for the quarter and was up 32.7% for the year to $15 million.
He added that the company continues to see “impressive performance” from its digital-only advertising initiatives. McClatchy’s Deal Saver daily deals service saw its revenue rise 40.2% during the fourth quarter compared to the same period a year ago.
Digital ad revenue made up 21.8% of the company’s total revenue in 2012. Telemantes said that direct marketing was also growing in revenue and importance for the company. Combined, digital advertising and direct marketing made up 36% of total revenue for McClatchy.
Telemantes also said that the company’s Impress Local digital marketing solution — which provides services such as website customization, search engine optimization and branding opportunities to businesses — showed positive results in its initial markets Kansas City and Fort Worth, Texas. The company plans to roll the service out in several additional markets in 2013.