Gannett says paywalls are generating strong revenue, despite circulation declines

News & Tech | PR Newswire | Gannett Blog
Gannett, the largest U.S. publisher with papers that have a combined weekday circulation of 4.9 million, says its digital subscription plan, paired with metered paywalls, is now active in 38 49 of the company’s 80 community newspaper markets. Gannett executives provided updates in a presentation last week to the Media and Entertainment Analysts of New York. (Update: It was 38 as of the presentation but has since climbed to 49, according to News & Tech’s list.)

Circulation volume is down 7 percent on weekdays and 5 percent on Sundays since the paywall rollout, Gannett Blog reports. Despite that drop, total circulation revenue is expected to increase by 25 percent by the end of 2013, community newspapers division President Bob Dickey says.

The digital subscription strategy is on pace to contribute $100 million of additional operating profit by the end of next year, Dickey said. Chief Digital Officer David Payne also said the company plans to re-launch all digital and mobile properties by that time.

Correction: This post originally mischaracterized the $100 million Gannett expects to gain from digital subscriptions in 2013 as “revenue.” The company actually predicts that amount of “operating profit,” which is revenue in excess of operating expenses but excluding any taxes or interest.

Related: Chicago Tribune launches redesigned website in advance of paywall (Tribune) || Earlier: Gannett’s poor 1st quarter results bode ill for newspapers in 2012 | All Gannett papers to get paywalls this year, except USA Today (Forbes)

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  • Anonymous

    Right, I wouldn’t expect the operating expenses are too high, especially because you can probably lump them into pre-existing circulation departments instead of separate line-items. Also since they’re only talking about 2013 operating income, that would not include the one-time startup expenses incurred in 2012.

  • http://flavors.me/eclisham Elaine Clisham

    Thanks! Wonder what the original revenue number has to be, to get to $100 million in operating profit? (Digital sub-related expenses are probably pretty low, right?)

  • Anonymous

    I’ll never buy my way over a paywall until some media outlet demonstrates LexisNexis level commitment to authenticity, research, and unique sourcing. Pay to read some intern’s rewrite of wire copy? No thank you. Don’t know who said it first, wasn’t me, but I agree (and this is a butchered, made-up quote): “When I worked at a newspaper, people always used to rag me for accuracy. What do you want, total accuracy for 25 cents a copy? Pay 3.95, then we’ll give you accuracy.”

  • Anonymous

    Good point, Elaine. I have updated and corrected the post. The specific answer is they expect $100 million of “operating profit” or operating income. So it would account for any expenses incurred and contribute to earnings before taxes or interest.

  • http://flavors.me/eclisham Elaine Clisham

    You say $100 million in *revenue* from digital subs; News&Tech says $100 million in *earnings*. (I have also seen it as earnings in other stories.) Could use some clarification here; thanks!