D.J. Lam, of my former students and an avid young journalist, has pointed me to a Stats Can release that deserves the headline he gave me: Telling us what we already know.
The press release, posted to the StatsCan web site on Wednesday, reports that the operating profit margin for Canadian newspaper publishers shrank in 2005, for the second straight year. The numbers are still pretty healthy: an operating profit margin of just over 13 per cent.
Operating profits for the industry amounted to $696 million in 2005, a $20-million decline from the previous year.
Operating expenses rose 5.2% in 2005, mostly the result of higher printing and distribution costs. Salaries, wages, and benefits, which account for 39% of industry expenses, rose 1.1%.
In contrast, operating revenue increased 4.1%.
For the surveyed portion of the industry, nearly three-quarters of revenues consisted of advertising revenues. Advertising revenues increased 2.2% to almost $3.9 billion in 2005, less than half the rate of growth of 4.6% in 2004.
The numbers are interesting: since 2003, there’s been a one-per-cent-a-year drop in the operating margin, and in 2005, the growth in ad revenues was less than half the rate of the year before, despite the relative strength of the Canadian economy.
The good news — an increase of 5.2 per cent in circulation revenue — covers up the reasons: a 3.5 per cent increase in the price of newspapers and a change in accounting, as newspapers started reporting gross circulation revenue, not revenue minus distribution expenses. I suspect that change hides a drop in what newspaper earn from circulation.
Finally:
The Internet has changed the way people access their news. According to the Canadian Internet Use Survey, 62% of Internet users chose to read news and sports articles online from their homes in 2005.
TAGS: NEWSPAPERS, CANADA, BUSINESS
