June brought more bad news for the newspaper industry, in the form of another negative forecast from Moody’s, the ratings agency. Moody’s senior credit officer John Puchalla warned in stark terms that earnings will drop over the next several years, as digital revenue growth fails to offset continuing losses on the print side.
“Revenue declines are relentless, and industry efforts to grow the digital business and reduce costs are not sufficient to offset pricing pressure and print volume losses,” according to Puchalla, who gave the entire newspaper business a “negative” outlook.
According to the most recent figures from the Newspaper Association of America, total ad revenues dropped 6.9% from $5.5 billion in the first quarter of 2011 to nearly $5.2 billion in the first quarter of 2012. This was due to declines in print ad revenues, which fell 8.2% to $4.36 billion over the same period. Online ad revenues edged up 1% to $816 million.
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