Rising stocks give hope for the future of newspapers

Despite plenty of stomach-churning gyrations, share prices for publicly traded newspaper stocks have been on an upward trend for the past year, reflecting optimism that even with declining ad rates, papers may finally be figuring out profitable business models that ensure their survival.

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Despite plenty of stomach-churning gyrations, share prices for publicly traded newspaper stocks have been on an upward trend for the past year, reflecting optimism that even with declining ad rates, papers may finally be figuring out profitable business models that ensure their survival.

Why does it matter?
There is no silver bullet that will bring back the profitable newspaper ad rates and valuations of the 1990s, but some newspapers now have a story and a business model that Wall Street can believe in.

Even with a late October drop in stock prices, companies such as The New York Times, Lee, McClatchy, and Scripps are largely up for the year. In contrast, Gannett posted third-quarter revenue up 3.4% to $1.31 billion.

Key Facts

1. Newspaper ad revenues will decline 9.5% from $22.5 billion in 2012 to $20.4 billion by 2016, according to market research firm eMarketer.

2. A 2011 University of Southern California report found 75% of Internet users find the Web an important source of information, but most people still don't deem the content found online reliable .

3. The Tampa Tribune, with daily circulation of 144,510, was sold in October for $9.5 million.

"Smaller dailies and weeklies continue to fare much better. Losing less print revenue gives them more time to transition to digital," says Newsonomics author Ken Doctor. "The stability we're seeing is in circulation revenues, aided by pay walls. Those papers that are properly implementing them are seeing 3% to 10% year-over-year revenue increases."

Regardless of stock prices, Paul Dusseault, senior VP at Fleishman-Hillard's Atlanta office, says the local print newspaper has to remain top of mind for most media outreach.

"Virtually every editorial print item makes its way online, but only a sliver of what originates online ever goes into print," Dusseault says. "Even if the client is eager for a profile in digital media, one of the tried-and-true paths to that is print newspapers. When it comes to moving the needle for our clients' reputation, traditional print media still commands the respect for those who are looking for reliable sources."

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