In graphic detail: What trends we can see from publisher 2021 earnings reports
The pandemic’s first year turned the publishing industry on its head, forcing executives to not only halt certain businesses, but to look for new revenue opportunities in an attempt to mitigate some of the impact.
In the second year, however, publishers seemed to have a better grasp on our new reality and saw some businesses come back online, working in conjunction with the primary businesses that kept their companies afloat — and in some cases growing.
While private publishers have revealed their cards from time to time with announcements of wins and reported setbacks, publicly traded publishers like The New York Times, Gannett, The Arena Group, IAC, News Corp., and now BuzzFeed, provide more of a glimpse into how specific revenue streams are bouncing back as well as audience behaviors around how they are consuming news.
Below are some insights we’ve gathered from six public publishers’ most recent earnings reports, most of which for the full year 2021 (News Corp’s Dow Jones/WSJ reports on its fiscal year, which runs July 1 – June 30).
Nearly all publishers in the above chart saw year-over-year growth from 2020 to 2021, which isn’t overly surprising given the pandemic’s hit to the economy and the advertising industry in the second and third quarters of 2020. Gannett, however earned about $200 million less this past year compared to 2020, though this only about a 6% decrease year over year.
On average, publishers saw a 20% change in their annual revenue between 2020 and 2021. While many of the publishers can equally celebrate in that growth, the breakdown in where that new revenue came from varies.
Where BuzzFeed and Gannett have advertising contributing over 50% of their annual revenue, the Times only earned a quarter of its revenue last year from ads. Meanwhile, IAC’s Dotdash Meredith and The Arena Group only delineated between print and digital in their reports, however, IAC added print revenue from the recent acquisition of Meredith Corp at the end of 2021.
Dotdash Meredith’s revenue breakdown changed the most drastically, thanks to its M&A dealings. In 2021, digital revenue consisted of display advertising, performance marketing and licensing, while print revenue is comprised of subscription, newsstand, print advertising and performance marketing revenue, according to its 2021 annual SEC filing. In 2020, Dotdash’s revenue was broken down by display advertising, performance marketing and affiliate commerce commission revenue, which totaled $214 million.
BuzzFeed is one of the only publishers willing to break out its commerce revenue and not classify it as “other” in its reports. And what we can tell from their 2021 commerce business is how significantly publishers were impacted by supply chain issues in the fourth quarter, though BuzzFeed claims that the 26% decline year over year in the fourth quarter was not exclusively because of the shipping delays and inventory issues.
Instead, the company’s CFO Felicia DellaFortuna attributed a portion of this drop off to “the world reopen[ing],” resulting in the return of in-person shopping, during BuzzFeed’s earnings call on March 22.
That said, BuzzFeed’s total commerce revenue for the year increased by 19% from 2020, totaling $61.6 million compared to approximately $50 million earned in 2020. This means its commerce content is attributable to approximately $600 million worth of transactions last year.
Publishers broadly are bullish on their commerce businesses in 2022, despite the return to in-person shopping, including Vice Media Group’s chief digital officer Cory Haik, who said earlier this year on the Digiday Podcast that she expects commerce to account for one-third of total revenue by 2024.
Each of the publishers — the Times, Gannett and WSJ — saw growth quarter to quarter, indicating that any existing churn didn’t leave a significant dent, but there were some trends affecting readers’ propensity to subscribe in 2021, such as the post-Trump slump and subscription fatigue.
News Corp’s Dow Jones and WSJ division saw modest growth quarter to quarter, but The New York Times hit a milestone in its subscriptions business at the beginning of 2022 — three years earlier than expected. The publisher had a goal of reaching 10 million paid subscriptions by 2025 and instead hit that threshold after the acquisition of The Athletic closed in February this year and added 1.2 million subscriptions to its total.
That said, the Times had made significant advancements on its own thanks to a surge in readers’ interest in news, as well as having multiple, vertical-specific subscription offerings around cooking, gaming and the Wirecutter. Between the acquisition and this multi-offering approach, the publisher is optimistic about achieving its new goal of 15 million subscribers by 2027.
In 2022, Gannett expects to exceed 2 million digital subscribers, an increase of 400,000 from the end-of-year total the company saw in 2021, and from there expects to grow at a 40% rate year-over-year through 2025, ultimately bringing the company to its goal of having 6 million digital-only subscribers by 2025, according to its latest earnings.
As Gannett had just launched a paywall on its marquee USA Today brand halfway through 2021, it only added 200,000 additional digital-only subscribers between first and second half. The goal for 2022 is to double that, which seems reasonable as the company tests different tactics to fill the subscriber funnel this year. From 2023 through 2025, however, significant bumps in new subscriptions well over 1 million per year will be required when compared to the 400,000 figure it’s looking to reach in 2022.
While IAC doesn’t break out subscriptions, of note is that Dotdash Meredith’s print business was still very impactful to the bottom line, contributing close to 57% of its total revenue in 2021, with digital accounting for the remaining portion.
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