Earnings Season - GCI

Gannett reported generally awful earnings yesterday, but the stock finished the day slightly up. Much like every other newspaper company out there, the soft economy is taking its toll. Classifieds are tanking. They said all of the same things as everyone else.

However, there was one notable exception. USAToday revenue was up around 2%. Given the toils in the industry as a whole, that is a near miracle.

My thoughts on why they were able to pull this off:

1. USAtoday doesn't depend as much on classifieds. Since this is the area that's dying the fastest for most newspaper companies, a product built without dependence is bound to be stronger.

2. Local isn't as important as most newspaper companies think it is. With the massive suburbanization that has occurred, and the prevalence of national brands for so many facets of life, local is a bit of a myth. The Chili's in the suburbs of St. Louis have the same marketing needs as the ones in the suburbs of Portland. The national buy potential can be very valuable. That said, local is still the competitive advantage for most papers and I want to make the point that there is still something there, just not the "everything" that publishers want to believe.

3. A national footprint creates inherent diversification. If Florida and California are tanking, you can make it up in Chicago and Boston (or other places that seem to be doing well).

What can the average paper learn from this? Personally I believe that it comes back to the argument of being a window out from the community, more than a window on the community. With the local, local, local mantra its easy to forget that things do matter outside of the immediate community.