Investment Bank Research Publications VSS News Archives
Private Equity Funds Media Indsutry Segments Media Industry Links Career Opportunities









 
INDUSTRY SEGMENT PERFORMANCE

08/02/00

Overall spending by advertisers and readers increased 5.1% to $63.1 billion in 1999, led by a 5.8% rise in advertising expenditures to $52.2 billion.
For the 1999-2004 period, overall spending is expected to rise at a 5.8% CAGR to $83.7 billion, with daily newspapers generating spending in 2004 of $75.0 billion and weeklies $8.7 billion. Overall growth is expected to be slightly faster than the 5.6% rate posted in the 1994-1999 period.

Notably, expenditures in national newspaper advertising jumped an unprecedented 17.7% in 1999, sparked by increased automotive spending, the success of national buying services like the National Newspaper Network (NNN), and Internet company spending.

Internet sites, like Monster.com have siphoned some classified advertising, particularly classified employment advertising, from newspapers. However, a bounce-back is expected over the next several years as the tight labor market compels employers to recruit through both online and offline channels.
Source: Veronis Suhler Communications Industry Forecast

11/09/99

The newspaper industry enjoyed one of its best years in the last decade.
Overall spending by advertisers and readers rose by 5.7 percent to $60 billion, with advertising increasing by 6.5 percent and circulation spending growing by 2.0 percent. Dailies accounted for $54.2 billion, up 5.4 percent over 1997, and weeklies for $5.8 billion, up 8.3 percent.

Over the next five years, growth in employment classified advertising will moderate from the double-digit increases of recent years, holding down overall classified advertising expansion despite a strong economy. A stabilization in the rate of job creation, even at high rates, will lead to a stabilization in the rate of growth in employment classifieds. Internet classified services could also cut into print classified spending. National advertising in daily papers, however, will accelerate, stimulated by national buying services that facilitate national purchases and by increased spending on the part of Internet companies. The emergence of new advertisers, particularly in the computer and electronics field related to growth in the use of the Internet and the rising popularity of wireless communications devices, will lead to a healthier picture for retail advertising. We project an upswing in circulation, reflecting growth in the demographic segments that read newspapers. Spending on daily newspapers will advance at an estimated 5.8 percent compound annual rate through 2003, comparable with the 5.7 percent annual rate achieved during the 1993-1998 period.

With respect to weekly papers, advertisers are spending more to reach the audience served by weeklies. A vibrant economy and the impetus to target weekly readers will propel advertising, while population increases in suburban and rural areas will contribute to circulation gains. Spending on weeklies will rise at a 7.8 percent compound annual rate, continuing the 7.7 percent annual pace of the last five years.

Over all, daily and weekly newspaper advertising over the 1998-2003 period will expand at a 6.7 percent compound annual rate compared with the 6.8 percent annual increase of the last five years, and overall circulation spending will rise 2.6 percent compounded annually, up from 2.2 percent annual growth of the last five years.

Advertising spending will total an estimated $68.1 billion in 2003 compared with $49.3 billion in 1998, and circulation spending will go up from $10.7 billion in 1998 to $12.1 billion in 2003. Total spending on all newspapers will expand by 6.0 percent compounded annually, growing at about the same rate as over the 1993-1998 period. By 2003, total spending on newspapers will reach $80.2 billion-$71.8 billion for dailies and $8.5 billion for weeklies.
Source: Veronis Suhler Communications Industry Forecast

1/04/99

The newspaper industry enjoyed a banner year in 1997.
Operating margins reached five-year highs -- 19.5% for operating income and 25.6% for operating cash flow. Revenues rose 9.3% to $24.2 billion; assets rose 20.1% to $25.8 billion.

Rising advertising revenues and declining newsprint costs accounted for the improvement in operating performance. In 1997, average newsprint costs fell 13.6% to $546 per metric ton. At the same time, continued strength in classified advertising, surging national advertising and revitalized retail advertising contributed to the large increase in revenues.

Four companies generated newspaper revenues of $2 billion or more in 1997, accounting for nearly half of the adjusted segment total. Largest was Gannett, whose revenues increased 7.7% to $3.8 billion, followed by Knight Ridder, with an increase of 21.3% to $2.9 billion, boosted by acquisitions of the Kansas City Star and the Fort Worth Star-Telegram; The New York Times Company, whose revenues rose 8.9% to $2.6 billion; and The Times Mirror Company, which saw a 5.6% revenue increase to $2.2 billion.
Source: Veronis Suhler Stevenson Communications Industry Report

10/26/98

Robust ad spending and circulation turnaround predicted for newspaper industry through 2002.
Total spending on daily and weekly newspapers is forecasted to expand at a 6.6% compound annual growth rate (CAGR) over the five-year period 1997-2002, reaching $78.0 billion by 2002 -- $66.0 billion for dailies and $12.0 billion for weeklies.

1997 was a year of robust growth for daily newspapers, with an 8.6% spending increase in advertising, led by double-digit upswings in both classified and national advertising. Circulation spending edged up 1.0%. The long-standing decline in daily newspaper circulation is forecasted to turn around, with the expectation that fewer consolidations will occur over the next five years than during the previous five: other drivers are increases in older population groups; increases in core circulation that are beginning to overtake decreases in fringe circulation; along with improvements such as better staffing, promotion, zoned editions, greater use of color, and higher-quality editorial products.

Advertising spending on weekly newspapers grew 8.6% to $5.0 billion in 1997 and is forecasted to grow at an 8.6% CAGR over the 5-year period, reaching $7.5 billion in 2002. Circulation spending grew 1.5% to $400 million in 1997 and is forecasted to rise at a 1.9% CAGR to $439 million in 2002. Factors fueling weeklies' growth include decreasing fringe circulation by metropolitan dailies, increases in rural/exurban population, and a trend toward free circulation.

Alternative weeklies, appealing chiefly to young urban professionals, are growing particularly rapidly, with advertising spending increasing at a 16.5% CAGR to $374 million and unit circulation at a 9.7% CAGR to 6.9 million in the five years 1992-1997.
Source: Veronis Suhler Communications Industry Forecast


Merchant Bank | Industry Links | Research Publications
Private Equity Funds | Industry Segments | Career Opportunities | Home

Please report problems to . Please read our Privacy Policy Statement

2002 Veronis Suhler Stevenson. All rights reserved worldwide