Both the Washington Post and Newsweek Are Loss Leaders At WPO
The Washington Post Co. (WPO) reported sharply increased net income for the third quarter, but if you thought that the flagship newspaper itself had much to do with that, you’d be sadly mistaken.
According to the company’s latest 8-K report filed with the Securities and Exchange Commission (SEC), the newspaper division did at least stem its operational losses to $23.6 million from $82.7 million in the same period a year ago.
This was partially accomplished through job cuts. According to the company, 211 Post employees accepted an early retirement offer earlier this year.
Meanwhile, the Washington Post, like most major metro dailies, has been steadily losing advertising pages. Ad revenue fell 33 percent in Q-1 this year, 20 percent in Q-2, and another 28 percent in Q-3.
Perhaps equally alarming, to me at least, is that the company’s web-based revenue fell by 18 percent in the quarter. This, despite a number of new attempts by the newspaper to attract more return visits, initially via a daily “afternoon edition” email that ranked that day’s headlines by popularity that now appears to have been augmented, as of today, by a more robust email feature called The Most.
The Most contains links to the not only the paper’s most popular articles, but to photos, discussions, most emailed stories, and so on.
At this point last year, overall annual revenue in the newspaper division stood at a shade under $600 million; today it stands at $485.9, roughly a one-fifth contraction year over year.
The news out of Newsweek is even worse. Revenue nosedived there by 33 percent to $40.2 million in Q-3, down from $60 million in the same quarter last year. The operating loss for the quarter was $4.3 million and has accumulated losses of $29.7 million through the first three quarters of 2009, a bit higher than the $27 million for the same period in 2008.
Early retirement offers have been accepted by at least 161 employees over the past two years, according to the filing.
So why does WPO still make money? The main reason is its Kaplan educational services, which is a cash cow at present, followed by some television properties that perform fairly well. But the Post and Newsweek have essentially become loss leaders during this extended print advertising recession, which shows only intermittent signs of changing anytime soon.
Related Bnet coverage:
Is the Washington Post Sinking its Own Ship?
In addition to serving as a BNET Media analyst/blogger, David Weir is a veteran journalist and the author of several books. Weir is a co-founder and vice-president of the Center for Investigative Reporting, as well as an editorial board member of The Nation.
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