Postmedia reports loss of nearly $36 million in fourth quarter
Postmedia Network reported a loss of nearly $36 million in the last quarter, roughly $7 million less than it made during the same period the previous year. The media company says it doesn't expect any improvements next year.
Postmedia Network reported a loss of nearly $36 million in the last quarter and the media company said it doesn’t expect any improvements next year.
Net loss in the fourth quarter ending August 31, 2013, was $35.8 million compared to a net loss of $28.4 million in the same period the previous year. The increase in net loss was primarily the result of an $11.6-million increase in operating losses. Postmedia has made several changes to cut costs, including suspending Sunday publication of its editions, putting its headquarters up for sale, centralizing production at its Hamilton, Ont., site and erecting paywalls.
“We anticipate the print advertising market to remain challenging and expect current trends to continue into fiscal 2014,” the company said in its financial documents.
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Revenue for the quarter was $169.3 million, a decrease of $20.8 million, or 10.9 per cent, relative to the same period in the prior year. This decrease was primarily due to a 16.2 per cent decline in print advertising revenue. Print circulation revenue decreased $1.9 million, or 3.6 per cent, as a result of declines in circulation volumes, which was partially offset by an increase in subscription prices.[node:ad]
Digital revenue decreased $0.5 million, or 2.4 per cent, relative to the same period in the prior year.
The company wants to cut its operating budget by $120 million by next year, The Globe and Mail reported, and said it has already cut $82 million. “Godfrey’s challenge is that of all newspaper publishers: find a way to increase digital revenues to replace the declining print revenue,” the Globe reported.
“We were the first major publisher in Canada to move to an online pay model for our newspaper websites and while we’re seeing audience uptake, we know that revenue from our website audiences will not make up for print revenue declines,” CEO Paul Godfrey wrote in a memo obtained by the Globe. “We are paying down debt from the proceeds of selling underutilized buildings, outsourcing non-core elements of our business and restructuring our operations to work more efficiently. All of these efforts are necessary, but none of them—either separately or combined—are enough, yet.”
The metered paywall, however, was never designed to solve the media company’s declining revenue problems, CBC reported.
“We don’t see the meter for being a panacea for the challenges of the industry, but we do see it as part of the puzzle,” chief operating officer Wayne Parrish said. “It has allowed us to shift somewhat elegantly away from the level of discounting we’ve had on the print subscription side by persuading those print subscribers to re-up at something closer to the face price for access to the digital products.”
Tamara Baluja is an award-winning journalist with CBC Vancouver and the 2018 Michener-Deacon fellow for journalism education. She was the associate editor for J-Source from 2013-2014.