Big Newspapers Companies Hit With Q2 Losses

Tribune Co. is not alone in its profit woes. The rising cost of newsprint, flat or falling circulation and poor ad growth has led to a dismal second quarter for several newspaper industry companies, reports The New York Times. While executives are blaming a weak operating environment for lower profits, they also vow to trim expenses and focus on the Web in the months to come. Tribune, McClatchy, Gannett and Media General have all shown stagnant or down profits. But analysts say the results were in line with expectations. “Nobody was expecting the second quarter to be a bang-up,” says John Morton, a newspaper analyst. “Advertising has not performed well this year, and they don’t have a great deal of control over that.” One big problem: Advertisers have been moving a lot of spending online. Says Colby Atwood, a newspaper analyst at Borrell Associates: “We’ve estimated that it takes 50 to 100 online readers to attract the same amount of revenue that one print reader does. That also reflects a lag in advertisers’ behavior relative to the audience’s behavior. The audience has moved to the Web, but advertisers are following more slowly.” – Read the whole story…

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