Economist profits up to £61m as paid subscriptions offset 18% print ad fall
Strategy of pushing readers to premium packages of print and digital content pays off for magazine, which this year severed links with Pearson
The Economist grew profits to more than £60m last year overcoming an 18% fall in print ad revenues by focusing on pushing its premium print and digital subscription packages to readers.
The weekly business magazine managed a strong year despite navigating arguably the biggest upheaval in its 173-year history with Pearson, the former owner of the Financial Times, selling its 50% stake to existing shareholders led by an investment company headed by the heir to the Fiat business.
The Economist Group managed to boost operating profit from £59.3m to £60.6m in the year to the end of March, a creditable performance given the pressures facing publishers.
The company said that print advertising fell by 18% last year, at constant currencies, and at closer to 10% when the impact of the strong US dollar is included. Nevertheless it has now dropped to such a level - while areas such as digital advertising have grown significantly - that the overall ad revenue decline was just 8%.
“Taking a longer view, advertising revenue from print peaked in 2009 at £118m; last year it was down to £47m,” said Rupert Pennant-Rea, chairman of the Economist Group, in a letter to shareholders.
“This means we are now well over halfway through the decline in print advertising that has hammered all ‘traditional’ media companies, and we have made considerable progress in filling the gap.”
The company said that the “composition” of the Economist’s media businesses are “now clear” with non-advertising activities representing 41% of revenues last year. Traditional print ads account for just 37%....MORE