For Immediate Release
Chicago, IL – November 11, 2016 – Today, Zacks Equity Research discusses the Publishing, Part 2, including Gannett Co., Inc. (NYSE:(GCI - Free Report) –Free Report), McClatchy Company (NYSE:(MNI - Free Report) –Free Report),tronc, Inc. (NASDAQ:(TRNC - Free Report) –Free Report),Rubicon Project, Inc. (NYSE:(RUBI - Free Report) –Free Report) and TEGNA Inc. (NYSE:(TGNA - Free Report) – Free Report).
Industry: Publishing, Part 2
Newspaper companies are transforming their business models to better position themselves in a multi-platform media universe. According to industry experts, these companies will focus more on mobile devices, online advertising based on user experience and personalized content to lower their dependence on traditional advertising revenues. They are also streamlining their cost structure, strengthening their balance sheet and restructuring their portfolio.
Let’s take a look at what’s happening in the publishing industry and how newspaper companies are adapting to the changing face of the media in the race for survival.
Industry’s New Game Plan
Newspaper publishing companies are diversifying their revenue base. They are striving to expand their presence in broadcasting and digital products with the aim of lowering dependency on soft print media business and traditional advertising, thereby reducing susceptibility to economic conditions. In line with this, Gannett Co., Inc. (NYSE:(GCI - Free Report) –Free Report),The McClatchy Company (NYSE:(MNI - Free Report) – Free Report), Tribune Publishing Company, now known as tronc, Inc. (NASDAQ:(TRNC - Free Report) – Free Report) and Hearst newspaper group joined forces to form a new national advertising network – Nucleus Marketing Solutions – with the goal to assist advertisers in reaching out to a mass audience.
In Jul 2016, Nucleus Marketing Solutions entered into collaboration with the Rubicon Project, Inc. (NYSE:(RUBI - Free Report) – Free Report), which operates one of the largest advertising marketplaces in the world. Publishers via Nucleus will make mobile, display and video inventory accessible to advertisers on Rubicon Project's technology platform. The partnership seems inevitable given the 2016 Presidential election where, as per The Pew Research Center, political digital advertising is anticipated to cross spending of $1 billion.
Newspaper publishing companies are even separating their broadcasting and digital properties from the sluggish print business. TEGNA Inc. (NYSE:(TGNA - Free Report) – Free Report) was formed after the parent company, Gannett, spun off its Broadcasting and Digital and Publishing units into two separate entities. The publishing division retained the name of the parent company, Gannett Co., Inc.
We further believe that separating the publishing division will help to better exploit the potential of the broadcasting and digital businesses. Moreover, once the companies are spun off, these will have separate management teams and a much more defined capital structure that will provide ample room for strategic decisions related to any investment, acquisition or a new endeavor that can benefit that particular business, and in no way affect the other.
Consolidation has its benefits of a stronger base and wider reach. No wonder, publishing companies are bolstering their strengths to optimize business profits.
As you can see, there are plenty of reasons to be optimistic about the newspaper publishing industry over the long term. But what about investing in the space right now?
Check out our latest Publishing Industry Outlook here for more on the current state of affairs in this market from an earnings perspective, and how the trend is looking for this important sector.
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