MEDIA & MARKETING:Turnover and operating profit show the State's largest newspaper publisher is doing well

DOOMSAYERS WHO believe the newspaper industry is on its last legs should ponder for a moment the 2010 results for Independent News & Media, the State’s largest newspaper publisher.

Last year, the Indo's various titles had combined turnover in Ireland of €400 million, down 4 per cent on the previous year.

In the context of the wider economic slump, that was a very creditable performance. And despite the economic woes, INM improved its operating profit slightly to €54 million. That level of profit margin – 14 per cent – would make most businesses very happy.

The resilient profit performance is all the more surprising given that advertising revenues across the Irish Independent, Sunday Independent, Evening Herald, Sunday World, Belfast Telegraph, Sunday Lifeand the group's provincial weeklies declined by 13 per cent last year. Although cost-cutting compensated to some extent, the main reason profits held up was that circulation revenues fell by just 2 per cent.

Many newspaper titles have bucked the deflationary trend that has affected other sectors. For instance, in 2005, the Sunday Independent'saverage circulation was 284,000 and the cover price was €2. Now that title's average weekly circulation is 254,000 but the cover price is €2.70.

That 35 per cent hike in the cover price in a period when consumer price inflation was 8 per cent has more than compensated for selling fewer copies. Back-of-the-envelope calculations suggest that the Sunday Indo's annual gross circulation revenues were 20 per cent higher last year than in 2005, despite a 10 per cent fall in sales.

With its other titles, INM's cover price hikes haven't been as aggressive. Over the past five years, the price of the Irish Independenthas gone up by 19 per cent, the Evening Heraldby 20 per cent, the Sunday Worldby 15 per cent and the Irish Daily Starby 8 per cent.

Where the segment competition is most intense, the price rises are the smallest.

Maybe it's not a coincidence the Sunday Timesis now the same price as the Sunday Independentand it will be interesting to see if this two-step is maintained when the INM flagship's cover price is increased to €2.80.

In another read-through of the media sector, UTV Media reports that advertising spend on radio declined by 10 per cent in 2010. The plc, which owns FM104, Q102 and other stations, says its Irish radio division outperformed the market, with revenue slippage limited to 2 per cent.

The chunky operating profit margin of 30 per cent suggests that radio advertisers are still paying a premium to get their message across on the airwaves.

The Munster Expressnewspaper in Waterford has been published for more than 150 years, so it is quite a departure for the title to abandon the broadsheet format in favour of a new compact design.

Established by the Fisher family in 1860, the Munster Express was taken over by the Walsh family in 1907 and editor Kieran Walsh maintains the proud family tradition today.

Published every Wednesday and Friday, the title has weekly sales of 7,000 copies across Waterford city and county, south Kilkenny and south Tipperary.

The decision to change to a compact format followed research which showed that readers want shorter stories. “I spent last Saturday afternoon driving to shops around the county and people told me the new format looks brighter and is more convenient to read,” said Kieran.

His father, JJ Walsh, was renowned for his enthusiasm for the Olympic Games. He first attended the Olympics in London in 1948 and never missed an Olympics thereafter, reporting on the event for Expressreaders.

Kieran recalls: “My dad was a legend. Before the second World War broke out, he bought a load of newsprint, which was enough to get the paper through the war. JJ was a great friend of Charlie McConnell who ran McConnells and he sold lots of ads as well as editing and writing.”

The Munster Expressis one of the last family-owned regional newspapers and Walsh says the family was never tempted to sell.

“There were a few approaches made to us but that’s history now . . . This newspaper has survived the Civil War and world wars but business is tougher now than it has ever been. Local advertising has been hit hard though we get good national advertising. Newspaper publishing is in our blood but sometimes it can make the blood boil.”