Gannett (NYSE:GCI) is a media company that publishes USA Today, the nation's largest newspaper by circulation, along with 85 other daily newspapers in the U.S. Additionally, GCI publishes 17 daily newspapers internationally as well as more than 200 weekly newspapers in the United Kingdom, which together account for 84% of GCI's revenue. Apart from publishing, Gannett also earns revenue through its digital and broadcasting segments.
Gannett's circulation numbers and attendant advertising revenues have been declining - a trend shared by many of the company's competitors, who are losing advertising dollars to the internet and other media. This spells doom for Gannett's publications as 73% of GCI's publishing revenues are earned through advertising sales. In an effort to offset these struggles with the print paper, Gannett is turning its focus to emphasizing other mediums (such as online and mobile) while de-emphasizing the print paper.
In an attempt to capitalize on internet advertising revenue, Gannett has built websites for its publications, and has acquired, built, or partnered with a number of websites like its CareerBuilder.com. The company's online advertising revenues increased by 72% in 2008 as the company continues to expand its online presence. However, the company's declines in traditional print and broadcasting advertising revenue contributed to GCI's 9% decrease in overall revenue during 2008.
Gannett is a media conglomerate that operates three businesses: publishing, digital, and broadcasting. GCI's publishing division, which includes its primary USA Today newspaper, is the company's largest segment in terms of revenue.
Gannett is the largest newspaper publisher in the U.S. by circulation. GCI publishes 85 daily newspapers including its flaghship USA Today and about 850 non-daily publications as well as affiliated websites. GCI also owns publication operations in the United Kingdom, with 17 daily newspapers and more than 200 weekly publications. The company's U.S. publications reach about 14 million readers every weekday and 12.6 million readers every Sunday, with the USA Today reaching about 2.25 million readers daily.
The digital segment, created in 2008, includes its online businesses like CareerBuilder.com and ShopLocal. CareerBuilder.com is primarily based in North America- the website is the largest online recruitment and career advancement source for employees, recruiters, and job seekers.
GCI's broadcasting segment includes 23 television stations and affiliated websites in markets with a total of 20.8 million households reaching 18% of the U.S. population. Like its other segments, GCI's broadcasting business earns revenue primarily through advertising sales.
Gannet generates most of its revenue from advertising, which includes both print and online channels. Like most newspaper companies, Gannett has suffered declines in print advertising revenue due in large part to the increasing popularity of the Internet and online advertising. Gannett has responded to the challenges of the print industry by increasing its own online presence, but is still failing to stem its decreases in advertising sales in its publishing and broadcasting businesses.
Several areas of print advertising have been particularly affected by economic conditions and the shift towards the Internet. GCI's publications rely primarily on automotive, retail, and classified advertising to earn revenue.
Gannett has worked to increase its online competitiveness and created the Gannett Digital group in 2006 to focus on these efforts. Its online initiatives have focused around developing Web sites for its existing newspapers and television networks. In theory, the company will be able to leverage its existing user base while gaining a better understanding of its audience through registration and measuring behavior online.
Though the age of the Internet has diminished the importance of the circulation of print newspapers, it nevertheless remains an essential factor to newspapers’ profitability. This includes both newspapers sold on newsstands as well as subscriptions. USA Today is the paid newspaper with the largest circulation in the country and Gannett has the highest total circulation numbers of any newspaper company, averaging about 6.6 million in daily paid circulation.
Similar to the decline in advertising, Gannett has suffered from ongoing decreases in circulation as readers transition to the Internet for their news.
Newsprint prices are a significant cost for any newspaper, and consolidation among suppliers has increased prices for newsprint. Gannett has been more aggressive than its competitors to minimize these costs, however. In the past, the company reduced the width of all but one of it presses and newspapers.
Gannett's competition is twofold: other newspapers chains, and increasingly, Internet websites. Gannett's national print competitors include New York Times Company (NYT)-publisher of the iconic namesake newspaper--and News Corporation (NWS)-publisher of the Wall Street Journal. It also competes with countless local newspapers such as the The Washington Post, and Hearst-Argyle Television (HTV)'s San Francisco Chronicle.