Gannett (GCI) – The USA Today publisher’s shares tumbled 13.6% in the premarket after it posted a wider-than-expected loss for its latest quarter and revenue below estimates. Gannett also said it expects revenue to fall this year, although it still expects to be profitable.
Gannett reported its financial results for the fourth quarter of 2021 Thursday. It was a decidedly mixed bag. Digital-only subscriptions had grown to 1.6 million by the end of the year, and roughly a third of its revenues came from various digital ventures.
On the other hand, total revenue for the quarter was $827 million, down from $875 million during the same period in 2020, a 5.5% decline. Print advertising was off by more than 10%, but circulation revenue fell, too.
That indicates that print subscription revenue is falling away faster than the new revenue generated from digital-only subscriptions.
Yes, digital subscriptions are growing, but that comes with a major caveat:
As I wrote earlier when Lee Enterprises reported big gains in digital subscriptions, Gannett’s surge appears to be driven by deeply discounted introductory rates. Revenues did not grow nearly as much year-to-year as the number of subscriptions — 26% vs. 49%. Average revenue per subscription is a bit more than $60 per year.
So as Gannett targets reaching 2 to 2.2 million digital subscriptions by the end of 2022, it faces the double challenge of holding the introductory subscribers as they move up to higher rates while also continuing to quickly add new subscribers.
From that Poynter story about Lee Enterprises earlier in February:
Lee Enterprises issued a quarterly financial report Thursday, continuing to boast of a rapid pace of digital transformation at its 77 daily newspapers. Statistics in the report, however, suggest that that 59% year-to-year growth in digital-only subscriptions appears to have been achieved only with deep discounting.
About that time the Akron Beacon Journal became part of “The USA Today Network.” I have been a Beacon Journal subscriber for 50 + years. Since Feb 14 I have had NO newspapers delivered to my semi-rural address where I have lived 45 years. I have called every day and have been told (when I could get past the automated system)that “there are production issues.” – “deliveries are runninglate”- we are very understaffed”- we are down more than 100 carriers” The carriers we have are running 6 or 7 routes a day.” How come this only became a problem two weeks ago ? No answer to that one. I have a feeling it might have to do with – um – pay cuts ? And with more jobs opening up, paper carriers would probably make more flipping burgers.
Thank goodness fro online comics. But I have had to buy puzzle books to make up for that.