Trump’s Lazarus effect saves dailies from death
DON’T sell newspaper stocks yet, they might have bottomed and could quadruple in the next seven years if US President Donald Trump gets reelected.
All top media companies recently reported what many had been fearful of admitting all year long. The man they love to hate has been good for business and that’s making America, well at least for the media firms, great again.
The Economist and Reuters, two of the more respected news sources recently conceded Trump’s maverick style has woken up a sleepy audience tired of political correctness and sterilized reporting. He’s got them reading, seriously reading, and buying papers.
Even the book publication industry that everyone wrote off as dead, jolted up when copies of “Fire & Fury” sold out within days of release.
Trump’s called nuclear mad North Korean leader “Rocket Man” and minces no words when he threatens “fire and fury” if they so test his patience.
At Davos, Switzerland he jokingly again called BBC “fake news” and liberal news agencies tore into him Another bump in sales, so it’s a Catch 22 situation, whatever they do, ratings go up and everybody makes money.
One of the first thing Trump did after winning the presidency was to visit the New York Times and personally complained face to face with the editorial board that he had been given unfair coverage.
They probably toned it down for a few days before turning back the heat. Still, The Economist says “his presidency has breathed new life into the newspaper and other mainstream media outlets.”
The New York Times, the Washington Post and the Wall Street Journal have all received boosts in subscriptions and page views; cable news networks, such as Fox News Channel and to a lesser extent CNN, were getting huge increases in viewers at a time when most other channels are losing them, it noted.
“Even the long-suffering stocks of newspaper companies are rallying. Since the election shares in the New York Times Co have risen by 42%, outperforming even the mighty Goldman Sachs,” The Economist said.
The unprecedented nature of political events has kept Americans glued to pages and screens. The pace of change since the election “compels Trump’s fans and foes alike to stay abreast of developments.”
Many want the kind of analysis that established and more trusted groups provide. Trump’s bashing of certain outlets has made it hard for anyone to ignore him.
“The Trump bump has been most pronounced at the New York Times. It managed to sign up more than half a million digital subscribers last year,” the Economist said.
That “included 276,000 in the fourth quarter alone, mostly after the election.” It now has 3 million subscribers in total, including about 1.7 million digital-only subscriptions.
Traffic to its site is 30% higher than a year ago. A never-ending flow of big stories helps.
The Washington Post does not disclose subscriber numbers under the ownership of Jeff Bezos, Amazon’s chief executive. But speaking at a conference on February 14th in California, Marty Baron, its editor, said subscriptions are growing “at a very rapid rate right now.”
The Wall Street Journal, owned by Rupert Murdoch, also saw a substantial boost in digital subscribers, to nearly 1.1million by the end of 2016, an increase of about 250,000 over a year earlier.
One way or another, people simply cannot get enough Trump. The three major cable news networks —Fox News Channel, MSNBC and CNN — have enjoyed the three biggest increases in viewership of all American cable channels in 2017, according to Nielsen research firm.
Each network enjoyed an increase of 40% or more in the six weeks to February 12th. Fox News is the most-watched cable channel, according to Nielsen.
The surge arrives at a challenging time for traditional media. In television, most cable channels are suffering declining viewership, which in turn puts pressure on advertising sales.
The situation for newspapers was until Trump’s arrival, more dire. The market in North America has been in decline since 2001.
Reuters also concluded that “The New York Times, the Financial Times, The Wall Street Journal and Gannett Co are building on the online readership they gained during the 2016 presidential election by marketing unbiased reporting as a sales strategy.”
It revealed that The Wall Street Journal added 113,000 digital subscriptions in its latest quarter, an almost 12 percent jump. The company said that January’s numbers were even higher, but it declined to provide figures.
Financial Times digital subscriptions jumped 6% in the fourth quarter to 646,000, while digital subscriptions at the 109 local newspapers across the country that make up the Gannett’s USA Today Network, grew 26 percent to 182,000 in the fourth quarter.
Meanwhile USA Today, which is part of the USA Today Network, and not subscription based, saw revenue grow 1.4 %.
Thailand usually takes a bit of time to catch up with the new reality, that is newspapers are profitable again in the USA and the Western world.
A full year’s statistics and such stark research numbers do not lie, a resurgence is underway and Trump fatigue is still some time away.
Meanwhile many Thai newspaper stocks are trading at historical lows, which is probably a good time for investors to review them as potential value stocks.
In business, the saying the trend is your friend, is never wrong and it would be dangerous to trade against it.
CAPTIONS:
Top: Even book sales were revived with “Fire & Fury.”
In-text: The crueler the cartoons, the bigger the audience.
By Cimi Suchontan
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