Blog Post

WaPo’s Print Picture Improves Slightly, As Digital Grows Stronger

Like most newspaper publishers last year, The Washington Post Co. (NYSE: WPO) was able to arrest the declines in revenue, though the print business is far from stable. Digital’s growth served as even more of a contrast, as 2010 revenues for the and Slate jumped 14 percent to $113.0 million, while Q4 dollars were up 13 percent to $35.5 million.

Those digital revenues were driven by the comeback in display advertising, which grew 18 percent for WaPo in 2010, and 12 percent in Q4. Even online classified ads were a little better than flat in 2010 — which considering where things were, can be considered a minor victory — and increased a decent 5 percent in Q4.

Of course, that’s not enough to balance out the problems on the print side:

— Print ads fell 6 percent to $297.9 million last year and dropped 12 percent to $82 million in Q4
— Daily circ slipped 7.5 percent, while Sundays declined 8.2 percent
— Overall, the newspaper segment posted an operating loss of $9.8 million in 2010, which is a considerable improvement over 2009’s $163.5 million loss. By Q4, things were looking more positive, as operating income came in $19.9 million, compared to the $3.2 million for the same period year before.

So while there’s gradual improvement, the uncertain economy and the continued erosion of print is still a source of worry for WaPo. Trying to build up the digital business is the main hope right now (though, of course, WaPo has become much more successful as an education services company through its generally more lucrative Kaplan higher ed business.)

In Gannett’s Q4 earnings report, CEO Craig Dubow noted that the company would double-down on “mobile and local” in its bid to refashion the paper and drive revenues higher. At the moment, however, both local and mobile are still fairly small to make much of a difference, though the long-term prospects are bright and current growth in those areas is pretty impressive.

WaPo doesn’t have the extensive reach that Gannett’s 80 community papers have, so it can only look to its backyard. Granted, it’s a fairly high-profile, influential backyard. Over the past few years, WaPo has faced numerous challenges on the local front, both on beltway news from Politico and from that site’s hyperlocal sibling, TBD. So far, DC-metro area based TBD hasn’t proved much of a threat, as the site dropped its ad network in December and would no longer serve ads on its partner blogs’ pages and websites.

Still, WaPo doesn’t appear to be waiting around for TBD or other competitors to gain traction. The company has already tried its hand at hyperlocal and failed, shuttering LoudonExtra in August ’09 after two years of trying.

Now, the company is taking a stab at aggregation with a site called Trove, which will collect news from 10,000 sources and personalize it. WaPo also is one of the backers of a subscription-based aggregator, Ongo, along with Gannett (NYSE: GCI) and the NYTCo (NYSE: NYT), all of whom provided $4 million in funding each to help launch the site last month.

WaPo has devoted about $5- to $10 million to the project, which comes amid a flurry of other news aggregators, notes Poynter’s Damon Kiesow, including Yahoo’s LiveStand and News.Me, which grew out of a separate NYT R&D project. So far, as newspaper digital executives are fond of saying, these are “early days” and this could be just another experiment. Still, it’s not that early any more, and as print continues to fall, it’s getting later for the digital side to make up for the declines.