Analysts praise the decision not to introduce a digital pay wall as being key to DMGT’s robust results with its sizeable online audience attracting advertisers. News International has just introduced a pay wall for the Times and The Sunday Times digital content and seen a huge drop off in users.
Andy Viner, head of media at analyst BDO, says: “DMGT’s third quarter update is generally positive, with trading ahead of management’s expectations. The group continues to reap the benefits of having a more diversified international portfolio compared to its rivals.”
He adds: “DMGT’s digital strategy is a success story for the group. It is well thought through and its current business model appears to be more sophisticated than that of its rivals. Taking a decision not to introduce a pay wall, like many of its competitors, seems to have reaped dividends. With 40 million unique browsers a month, they are surging ahead of their competition. The digital advertising revenues are fast following.”
DMGT’s revenue for the three months to 4 July is £508m and the company says this represents a 6% rise on a like-for-like basis.
Consumer media operations chalked up £274m in revenue in the quarter, 10% down on year on year but underlying revenues are up 4% up.
Associated Newspapers, publisher of the Daily Mail, saw total revenues drop by 3% to £201m but ad revenues rose 13% with display up 15% and digital up 46%. Retail, the largest display category, grew by 16%.
Regional press operation Northcliffe Media saw total revenues drop 4% to £66m with ad revenues down 4%. The company has just dissolved its Associated Northcliffe Digital division.
The company says that “current advertising trends” and more staff reductions will help it towards profitability for the full year.