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More Bad News for Newspapers: Internet Growth Slowing

As print revenue for newspapers continues to decline, the industry may be facing more bad news: online growth seems to be slowing, just at a time when newspaper executives had been hoping the pace would pick up.

Interactive revenues for the Tribune Company - just purchased by real estate mogul Sam Zell - grew 17 percent in the first quarter, down from the 29 percent average annual growth in 2006, writes MediaPost.

The New York Times Co.‘s internet revenue rose 21.6 percent, down from total annual growth of 39 percent in 2006. The Times’s About.com property also saw a slowdown, with 21 percent growth in Q1 07 compared to an annual growth rate of 50 percent in 2006.

Tribune’s overall operating revenues fell 4 percent, with operating profits down 16 percent. The company’s publishing group saw total revenue slip 5 percent. Ad revenue for the publishing group fell 6 percent.

The New York Times Co.‘s total profit fell 9.9 percent, with print ad revenue declining 3.4 percent.

Gannett also announced its first quarter results: total revenue declined slightly from $1.88 billion in 2006 to $1.87 billion in 2007. Total ad revenue dropped 1.9 percent.
The slowing of growth may indicate a quicker tapering off of internet growth than was previously expected, says Ken Doctor, a newspaper analyst with Outsell Inc. He believes that when newspaper companies emerge from this time of transition, they will be “significantly smaller companies.”

Doctor foresees further cost reductions in terms of production and circulation.