12 July 2007

Growing Pains

Online growth will not offset traditional print losses for at least four years, a Goldman Sachs market analyst said this month in rating two U.S. media companies – including the owner of online usage-leader The New York Times – as ‘sells.’

Analyst Peter Appert said the transition from a print focus to one that blends print and online outlets presents difficulties for newspaper publishers. He anticipates the companies will face falling revenue, margin pressure and reduced free cash flow over the next several years as they acclimate to the transition.

`Ultimately, we believe newspaper publishers will re-emerge as very healthy and dominant players in the local media marketplace, but with margins that will not likely match the more than 20 percent levels the industry has historically enjoyed,’ Appert wrote in a client note.

A more complete version of the story is available from several online sources, including Forbes.

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