Australian press dusts itself off
It has been speculated those six months ago worse than expected first-half results led analysts to cut share price targets for local media companies and warn that advertising revenues might not revive till 2012.
With advertising picking up more strongly than expected, share prices have come off the floor, and analysts and media buyers are sounding a lot more optimistic. Now those gloomy predictions look overblown.
“Newspapers are in a much stronger position than perhaps some of the headlines suggest,” says Simon Davies, head of print at media agency OMD. “Certainly the Australian market has got off very lightly compared to other markets.”
One leading analyst believes short-term, cyclical factors hurting the sector have got confused with long-term, structural decline.
“Coming into the down cycle some add the two together and everything looks horrendous,” she says. “Whereas coming out, people are realising the structural issues are still some way away before they really start to bite.”
Bank of Scotland media analyst Fraser McLeish garnered coverage last week when he put “buy” recommendations on Fairfax Media and APN News & Media and upped his target prices for both.
Fairfax, publisher of papers including The Sydney Morning Herald, The Age and The Australian Financial Review, is trading close to $1.80 from lows of about 80c in March. Regional giant APN is close to $2.50, compared with 95c in June.
West Australian Newspapers, publisher of The West Australian, which was close to $3.70 in November last year, is almost $8. News Corp (Australia’s biggest publisher, and publisher of The Australian) was last week trading above $16, off a year-low of $8.93.
Underpinning the recovery is a resurgence in ad revenue, McLeish says. Also, with more than 90 per cent of job ads now online, he believes the shift in ad volumes from print is largely complete.
“The world was looking a very different place six months ago,” he says. “We saw some pretty big declines in classifieds and in job advertising in particular. That has mainly been cyclical rather than structural. As the tide turns, you will see growth in the amount of advertising return to online and to newspapers … I expect a big chunk of it to come back.”
Others argue the underlying confidence in “traditional media” never really went away. According to ad revenue monitoring firm Standard Media Index, in the 12 months to September 30 newspapers accounted for 19.5 per cent of bookings by the main media agencies, a level virtually unchanged from two years ago.
———————————-
Want to Sell Online? Place Free Ads? or Jobs Ads?. Visit us now, we are an Australian Classifieds Ads site offering online classifieds Australia