Australia’s media giants Fairfax and News Corp are beginning to see glimpses of a revenue recovery within their newspaper stables.
The rivals, like pretty much every other media company around the world, have struggled for years with falling advertising revenues as readers ditched newspapers for the internet.
But a recovery could be on the way.
In trading updates on Thursday, Fairfax and News Corp both reported significant slowdowns in newspaper revenue falls.
News Corp boss Robert Thomson said total newspaper revenues fell three per cent in the first quarter, but there were signs of “green shoots” taking root in the ad market.
News’ Australian mastheads, which include The Daily Telegraph and Herald Sun, had witnessed a strong improvement in car and real estate ad sales.
“In a sense what you have got in Australia … is that the Murray River had silted up and that river is now flowing again,” Mr Thomson told analysts in a conference call from New York on Thursday.
The quarterly drop in newspaper revenues was half that reported in the final three months of last financial year.
It was also a solid improvement on the 10 per cent drop News reported during its first quarter a year ago.
Australian ad revenues fell five per cent in the September quarter, much less than the 16 per cent drop in the previous three months.
Local earnings also rose, although News did not reveal by how much.
Mr Thomson said the improvements in Australia were aided by a focus on local ads, price hikes for several newspapers, and cost cuts.
Despite the newspaper revenue slide, News reported a better-than-expected four per cent rise in total group revenues to $US2.15 billion.
At the Fairfax annual general meeting in Melbourne, chief executive Greg Hywood said Metro newspaper revenue falls had moderated.
Publishing revenues were down four per cent so far this financial year.
But the entire Metro Media division, which includes The Age, The Sydney Morning Herald and the Domain real estate website, lifted revenue two per cent.
A year ago, shareholders heard Metro revenues were down nine per cent for the corresponding period.
Fairfax group revenues also showed improvement, down by between two and three per cent so far in 2014/15, compared to a six per cent fall 12 months earlier.
Investors responded positively to News’ result, pushing the group’s shares up $1.12, or 6.6 per cent, to $18.08.
However Fairfax shares dipped one cent to 80 cents.
Morningstar media analyst Brian Han said News Corp’s comments on the ad market were encouraging, but it was too early to tell if the trend would continue.
“I think Australia is recovering, but the UK is still struggling somewhat,” he said.
NEWS CORP ENJOYS REVENUE RECOVERY
* News and info services down 3.0 pct to $US1.451b
* Book publishing up 24 pct to $US406m
* Cable network programming up 5.0 pct to $US139m
* Digital real estate up 24 pct to $US112m
* Total revenue up 4.0 pct to $US2.15b