Lee Enterprises reports growth in digital advertising, but total revenue falls 5% in Q1 report
Advertising and marketing services revenue fell 8.8 percent to $105.6 million, with retail advertising down 8.4 percent, classified down 13.4 percent and national down 5.7 percent
The 4 daily newspapers in 23 states, Lee Enterprises, today reported its earnings for its first quarter of fiscal year 2016. The company reported good growth in digital revenue, including mobile, but that growth could not compensate for continuing declines in print advertising.
Total operating revenue for Q1 2016 totaled $168.4 million, a decrease of 5.0 percent compared to the same quarter the prior year. Advertising and marketing services revenue fell 8.8 percent to $105.6 million. Retail advertising was down 8.4 percent, classified ad revenue fell 13.4 percent, and national advertising revenue fell 5.7 percent.
But digital ad revenue rose 7.2 percent, and now represents over 20 percent of total advertising revenue in the quarter. Mobile advertising revenue grew 12.4 percent, and digital services revenue, primarily from TownNews.com, increased 5.7 percent to $3.3 million.
“We are off to a strong start in 2016,” said Mary Junck, chairman and chief executive officer. “Digital advertising, subscriptions, digital services, commercial printing and other revenue accounted for more than half of our total revenue in the quarter. All of these categories are growing, and we see opportunity for future expansion.”
“We have made excellent progress with several key initiatives,” Junck said. “In the first quarter, we re-launched several of our websites with a new design aimed at improving reader engagement and driving digital revenue. We’ll transition all of our websites to the new design throughout this year.
“Re-designed print products have been introduced in many of our markets, and they have been very well received by our readers. This on-going re-design and transformation of how we produce and present news, which we call the ‘daVinci Project,’ not only improves the look and ease of use of our newspapers, but also, through resource consolidation, creates significant cost savings,” she added.
“Currently, 40.3% of our print subscribers have activated the digital subscriptions available to them through our full access subscription model, which continues to grow, providing our print readers with on-demand breaking news. It also helps grow our digital audiences.”
Lee Enterprises will begin an executive management transition beginning with its annual meeting on February 17. Junck, who has been CEO for 15 years, will become executive chairman, and Kevin D. Mowbray, who currently serves as executive vice president and chief operating officer, will be promoted to president and chief executive officer.