Newspaper advertising spend revealed to have fallen by a third in August
August was a tough month for the media industry across the board, with newspapers suffering the worst decline in demand from media agencies, new data from Standard Media Index indicates.
In comparisons which look worse because of healthy cyclical spend in August last year, agency spend on behalf of clients was down by 32.7% for print newspapers and by an even worse 35.4% for their digital offerings.
Why do I immediately think of Domain? Because Fairfax’s geniuses are in the throes of pushing our the offer for the float? Or because the private equity exercise revealed a large hole that could not be explained? Answer: both.
Hywood and his mate Catalano have one leg over the barbed wire fence, and I suspect they’ve only just noticed the spiky sensation. Put simply: Domain is not a digital business, but a brand spread over all of Fairfax media. In many ways it’s an accounting invention. Its biggest driver is an almost incomprehensible real agent equity incentive that goes into the Fairfax balance sheet.
Anyhow, the whole allure is based heavily on two thoughts: that the newspaper business can keep delivering and that the market buys the Domain separation. Unfortunately, the first part is looking very very doubtful, which raises the question of the second.
If Domain is to be a separate ASX listed business, what’s left in Fairfax? Fairfax shareholders will be very interested to see what the prospectus brings. I hope ASIC is looking too. It might be time to engage that illustrious Fairfax board of directors, even if the genius behind Hywood has now turned his attention to gay marriage (not).
Wow. Those year-on-year revenue drops for Newspaper (and magazine) businesses are not mellowing at all, they are just getting steeper. One very significant development here: their digital revenue — once held up as the thing that would help compensate for hemorrhaging print dollars – is now deteriorating faster than print revenue. The outlook is bleak indeed.
Do markets REALLY move this much in a single month, or is it the measurement of the market that does?