By last year's holiday shopping season, it was clear that Amazon and similar digital sales options were sucking the lifeblood from department stores and other brick-and-mortar outlets.
The situation has only worsened as 2017 has gone on, leading to a 23 percent year-to-year decline in print advertising at McClatchy Co,. the first of the publicly traded newspaper companies to report third quarter results.
McClatchy's total ad revenues were down 13.4 percent and overall revenues down 9.4 percent, leading to a net adjusted operating loss for the quarter of $5.9 million on revenues of $212.6 million.
In discussing the report in a conference call with analysts Monday, CEO Craig Forman, said, "bankruptcies and store closings are beginning to have even more of a bite." In time, targeted retail digital ads will pick up some of the slack, he continued "but those changes are discontinuous and bumpy."
The company was able to keep losses as low as they were by reducing costs year-to-year by 9.4 percent.
As I wrote earlier this year, the company is sending visiting teams to its 31 newsrooms a few at a time, emphasizing an improved digital report and building traffic, often in tandem with staff reductions.
In the quarterly report, Forman offered a metric of progress for that program: page views per editorial dollar spent are up 80 percent more at properties that have been through the transition than at those that have not yet.
The company's effort to sell more digital-only subscriptions proceeds slowly, interrupted in Miami by a decision to take down the paywall during Hurricane Irma and its aftermath. McClatchy is targeting 100,000 for paid digital subscriptions by the end of the year but has only 93,000 to date.
With print subscriptions lagging, audience revenues were down 4.3 percent compared to the same quarter in 2016.
The company has closed on real estate sales in Kansan City and Sacramento and sold most of its interest in the CareerBuilder digital job board. Those transactions generated proceeds of more than $110 million — much of it applied to paying down debt.
Wall Street did not react strongly to the earnings news, with McClatchy shares trading at $7.24 down about 3 percent since the beginning of the week.
Larger companies — Gannett, New Media Investment Group, Tronc and New York Times — will be reporting results later this month and first of next.