Davenport-based newspaper publisher Lee Enterprises is nearing a major milestone. Its digital-based revenues are near the point of outpacing revenues from its print products.Â
The company is “steadily becoming sustainable solely from the revenue” of its digital products, according to Lee’s CEO.
Those are some of the main highlights of Lee’s second quarter report released Thursday, May 2. More details on the preliminary quarterly report can be found here. (That report is for the fiscal period that ended March 24.)
Some of the top highlights of the report include:
- Lee’s total digital revenue of $71 million now represents 48% of the company’s total revenues.
- Digital-only subscription revenues increased by 48%.
- However, the company’s print advertising and print subscription revenues are both falling sharply.
In the Quad Cities region, Lee is the publisher of the Quad-City Times, The Dispatch – Rock Island Argus and Muscatine Journal newspapers. It publishes more than 350 weekly and specialty publications serving 73 markets in 26 states.
“We are pleased with our impressive digital subscription revenue growth and expanding digital subscriber base. We now have 745,000 digital subscribers, a 25% increase over the prior year. Digital-only subscription revenue grew 48%, and totaled nearly $75 million over the last twelve months, positioning us toward our long-term target of $150 million,” said Kevin Mowbray, Lee’s president and chief executive officer, in a news release.
Mr. Mowbray added “The rapid growth of our digital subscriptions and revenue, the expansion of Amplified Digital marketing solutions, and thoughtful investments into our digital infrastructure are proof we are steadily becoming sustainable solely from the revenue and cash flow generated from our digital products.”
The president and CEO also said the company delivered strong second-quarter operating results as it improved overall revenue trends and managed operating expenses.Â
Some other second-quarter highlights include:
- Total operating revenue was $147 million. Operating revenue was affected by accelerated declines of print revenue streams and elimination of certain print products, partially offset by growth in digital revenue.
- Total digital revenue was $71 million, an 11% increase over the prior year, and it represented 48% of the company’s total operating revenue.
- Revenue from digital-only subscribers totaled $20 million, up 48% over the prior year.
- Digital advertising and marketing services revenue represented 71% of Lee’s total advertising revenue and totaled $45 million.
- Digital services revenue, predominantly from BLOX Digital, totaled $5 million in the quarter.
- Operating expenses totaled $152 million and cash costs totaled $133 million, a 10% and 16% decrease, respectively, compared to the prior year.
- There were sharp declines in the print revenue side. For instance, print advertising revenues fell about 40% from March 26, 2023, to March 24, 2024. Also, print subscription revenues fell about 32% over the same period. Total print revenues have dropped about 28% during the period.
