In its third-quarter trading update, Reach, the UK’s largest publisher, has announced a continued year-on-year decline in total revenue of 7.8%.
The drop was led by a 13.7% year-on-year decline in digital revenue. Total print revenue also fell 5.8% year-on-year, led by an 8.9% decline in print ad revenue.
Reach announced its full-year profit expectations were, however, unchanged from earlier in the year.
“The factors affecting Q3 digital revenue are unchanged from those outlined in our half year results,” the trading update said. “These include depressed open market yields and the well-publicised declining digital referral volumes, in particular from Facebook’s de-prioritisation of news.”
Over the nine-month period from the beginning of the year, Reach’s page views have now fallen 21% compared to the year prior.
However, Reach CEO Jim Mullen expressed confidence that the publisher’s “data driven strategy is working” and that the company has made progress on diversifying its audience. This year, a number of Reach titles, including the Express and Mirror, launched US editions to appeal to audiences across the pond.
“Through this challenging period we have remained focused on the controllables,” reiterated Mullen, adding that Reach will “continue to review our cost base so that we can accelerate our digital transformation.”
Shares of Reach rose over 3% today following the report.
Analysis: Anti-social behaviour
Reach has laid much of this year’s business struggles at the foot of Meta, which has decided to “deprecate” news on its platforms Facebook and Instagram in the UK, Canada, and Australia this year. In Reach’s half-year financial update, the company said that page views would only have been expected to decline 2% if Facebook had not changed its algorithm to de-prioritise news.
Mullen, who also chairs news media trade body the News Media Association (NMA), has strongly criticised Meta for the decision, arguing that the social media giant is “choking trusted news” by harming publishers’ ability to attract and monetise traffic.
“With Ofcom reporting Facebook as the third most prevalent source of news for UK consumers, this decision is both financially damaging and deeply concerning for democracy and society,” Mullen and NMA CEO Owen Meredith wrote to former Deputy Prime Minister and Meta president for global affairs Sir Nick Clegg last month. “If genuine editorially controlled news is not available on the platforms where users are looking for it, society suffers.”
X (née Twitter) has also taken steps in recent months to drop support for publishers. Most recently, the site stripped news headlines from story links to “improve the esthetics [sic],” according to owner Elon Musk.
Social media sites’ changes have had a significant negative effect on all publishers relying on digital advertising revenue. As such, many have taken to brand-building practices to regularly lure readers to homepages. Other revenue models, such as micropayments, are also being explored by some, especially smaller publishers.
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