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Summary:

Online earnings are falling despite booming audiences at leading UK news publisher Trinity Mirror, caught in a confluence of circumstances that prompt the big question — does content pay?

Simon Fox, HMV CEO

What on earth is holding up digital growth at the UK’s largest newspaper publisher?

Online sales, which most publishers see growing because digital is still an expanding opportunity, are again declining at Trinity Mirror.

Reporting results for the 17 weeks to October 28, the Canary Wharf-based outfit said digital revenues fell by one percent from the previous year.

Only with the accountant’s addition of Communicator Corp, the smart email marketing and loyalty services vendor Trinity Mirror acquired in December 2011, are digital sales up — by eight to nine percent, to £14 million ($22.3 million) for the period.

And it’s not the first time we have had to report on digital declines at the Wharf — we have been doing so for the last three years or so. During that period, however, traffic to the publisher’s sites has boomed

So what’s going on?

  • Classifieds pressure: In its disclosure, the publisher cites “a 17 percent decline in the more cyclical classified advertising categories — in particular, recruitment”. That wiped out a 13 percent jump in online display ads and a doubling in digital marketing services as provided by the likes of Communicator and Trinity Mirror’s sports web design agency Rippleffect. Clearly, the local jobs market in this economy is not helping Trinity Mirror, which has dozens of specialist classified sites.
  • Bingo’s stopped paying out: One of its biggest national cash-cow ideas, the betting site MirrorBingo, has turned down thanks to a glut of new lifestyle-gaming competitors.
  • Sleeping beauty: Many of Trinity Mirror’s regional news sites were, for years, busy and hard-to-navigate — chores to visit. They are having to shrug off prolonged perception difficulties.
  • Content doesn’t mean cash: Many of the publisher’s regional sites are now outputting news built for the modern web — real-time, youth-oriented, community-centric and highly local. The local content is getting really good. But that digital stuff is not translating into money on the balance sheet.
  • Grubby Mirror: Battling with web-native celeb sites and Mail Online, each of which it sees building large audiences at relatively little cost, The Mirror, often a fine and issues-led working-class newspaper, is now chasing eyeballs with trashy Hollywood gossip and fleshy photos. The audience is, indeed, growing — but so is the disconnect within the title’s masthead.

Having come from troubled entertainment retailer HMV, which saw CD sales on which it relied fall off a cliff, new CEO Simon Fox will recognise today’s Trinity Mirror – a provider whose content has never been more popular but whose ability to monetise that content, digitally, is in question.

Fox must now follow the path he has outlined — improving digital products and placing more pay-for prospects in readers’ hands — while buying further into marketing services and fundamentally reviewing what news can mean to the company’s bottom line nowadays.

  1. Ads don’t generate the cash. IT’s that simple. It’s too much work to create content.

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  2. A fantastic summary – our whole team had a look. The options for monetisation can all be double-edged swords I think, but the surest route to failure is for them to stay as they are.

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