Digital revenue at Daily Record and Birmingham Mail publisher Trinity Mirror (LSE: TNI) was up 35.6 percent to £34.3 million throughout 2007 and now represents 3.7 percent of all revenue – just 0.9 percent more than last year. TM will hire 100 more digital staff this year, most in advertising.
“It’s become a meaningful part of our business,” CEO Sly Bailey said in the analyst call, repeating the “d” word time after time after time. Indeed, though 2006’s £88.9 million loss turned in to a £21 million profit, revenue dipped 3.2 percent to £971.3 million and economic conditions make this year’s ad market “volatile”.
Bailey talks of a “technology-led operating model”, ie. a self-service web dashboard for advertisers and a multiplatform copy input system for journalists.
— Regionals: Digital revenue was up exactly a third to £30.4 million and audiences up 27.8 percent in the year Trinity launched 20 hyperlocal websites. But digital profit of £9.8 million doesn’t sound massive, even if it’s up 58.1 percent. Bailey dressed up new, newspaper-branded sites as “key differentiators” that increase “interactivity” and have the inevitable “user-generated content” – but really they’re just the undoing of the “ic” portal brands to more sensibly play to existing mastheads (ie. icLiverpool is now unraveled as Liverpool Liverpool Daily Post and the Echo). Overall regional profit is down 4.6 percent to £109 million because print fell, though circulation revenue was up on higher cover prices. Ad revenue was flat.
— Nationals: Digital revenue was up 56 percent to £3.9 million – far less than even the regional sites, but then TM’s national portfolio includes the ill-fitting Mirror, People, Daily Record and Sunday Mail titles. Bailey advised to expect bigger digital figures from regional than national but new kinds of national, online-only sites. Even so, TM boasts national sites “have proved very attractive to advertisers”, especially so for Mirror Bingo. Overall national profit is actually up 17.6 percent to £94.3 million, with print circulation revenue up on higher cover prices despite falling circulations proper.
— Advertising: Though the market looked up in 2007, “there was month-by-month volatility and we expect this to continue to be a feature of 2008”, which has already seen a “weak start” with ad revenues expected to be down by three percent over January and February. In the call, Bailey said: “At this stage, it is very difficult to call the ad market – it may be very turbulent in ’08.” She’s “cautious”.
— Acquisitions/Disposals: In ’07, TM spent £13.1 million on digital acquisitions – ie. TotallyLegal, The Career Engineer and Globespan, all being integrated in to a “centre of excellent” at the “mothership” of TM’s former Hotgroup classifieds office in Kensington. CFO Vijay Vaghela said digital investments came mostly from cost savings and that’s not going to change.