The threat of renewed recession combined with ongoing secular change to produce another round of declines in newspaper advertising revenues in the third quarter of 2011, judging by weak preliminary results from the New York Times Co., which usually leads the industry.
On Wednesday NYTCO CEO Janet Robinson told analysts that the company expected total advertising revenue to decrease about 8% in the third quarter to about $264 million, due to growing economic uncertainty, which results in advertisers "less frequently committing upfront."
That's roughly twice the decline originally forecast for the third quarter, as secular declines are now compounded by economic woes.
In a telling development, Robinson said NYTCO expects even digital ad revenues to drop, forecasting a decline of 2% to 3% in this area. Print ad revenues will probably decline about 10%, she said.
The NYTCO forecast is an ominous sign for the newspaper industry, which has failed to halt steep advertising revenue declines following one of the worst economic downturns in decades.
Now, with the prospect of a second recession or "double dip" looking increasingly likely, there seems to be little hope that the industry will be able to stabilize the situation, let alone recover.
Indeed, the situation could be even worse for other newspaper publishers, as NYTCO has usually fared better than its peers. For example, in 2010 total NYTCO revenues declined 1.9% to $2.93 billion, while Gannett's publishing division saw total revenues slip 5.6% to $4.05 billion, McClatchy fell 6.5% to $1.38 billion, and A.H. Belo decreased 6% to $487 million.
More recently, NYTCO said total revenues fell 2.2% in the second quarter of 2011, compared to declines of 4.9% at Gannett's publishing division, 8.1% at McClatchy, and 5.8% at A.H. Belo.