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Industry facts and figures

About the survey

The following data release is for Statistics Canada’s annual survey of Newspaper Publishers, which surveys companies under the North American Industry Classification System (NAICS) industry 511110. This NAICS industry consists of establishments engaged in carrying out operations necessary for producing and distributing newspapers, including gathering news, writing news columns, feature stories and editorials, and selling and preparing advertisements. Newspapers included in this definition are daily newspapers, community newspapers, or other newspapers that provide general news and information of current public interest. The industry also includes ethnic newspapers and university student newspapers, but it does not include shoppers or newspapers devoted to a single theme (e.g., business, entertainment). Printing establishments that do not publish any newspapers are also excluded. The boundaries of the NAICS industry should be considered when making comparisons between these and other industry estimates.

This survey was not conducted in 2002, however estimates have been produced for the year based on administrative data and industry sources. Estimates for the previous survey year (2005) were revised to reflect updated information.

In the reporting year of 2006, 135 questionnaires were mailed out to business entities representing 644 establishments. The survey portion of the overall industry estimate represented 54% of all newspaper publishing establishments and 97.5% of estimated revenues for the industry. The survey portion accounts for all daily newspaper operations and all but $132 million of operating revenues for community newspaper establishments.

Industry revenues

Total operating revenue for newspaper publishers was $5.34 billion in 2006, up 2.6% from 2005. The pace of growth was slower than in each of the previous three years when rates of growth were 4.5% (2003), 3.5% (2004) and 3.4% (2005). However, the Canadian newspaper publishing industry avoided the contraction that took place in the United States in 2006 where newspaper publishing revenues declined 1.7%.

Newspaper publishing revenue has increased 14.4% since 2000, a figure that is almost identical to inflation in the overall economy over the same period as measured by the Consumer Price Index. ¹ 

The newspaper publishing industry generates revenue primarily from advertising and from paid circulation for its newspapers. Circulation and advertising are closely linked, as a newspaper’s readership levels are important in determining its ability to earn advertising revenue.

Advertising revenues

Advertising is the largest source of revenue for Canadian newspaper publishers, accounting for roughly 76% of industry operating revenues. This includes sales of advertising space in the newspaper as well as revenues from inserts and flyers (see Chart 1).

Note(s):  Surveyed portion only.

Of the $3.98 billion in advertising revenues ²  generated by the industry in 2006, daily newspapers earned $2.85 billion, an increase of 1.9% from 2005. Community and weekly newspaper publishers earned $1.13 billion in advertising revenues. Since 2000, advertising revenues have increased by 29% for community newspapers in comparison to the 9% increase for daily newspapers.

Daily newspapers earned 32% of their advertising revenues from national advertising in 2006, while national advertising accounted for only 9% of ad revenues for community papers. On the other hand, local advertising accounted for 74% of ad revenue for community papers last year, and only 40% for daily newspapers. Classifieds are the third source for advertising, and they accounted for 28% of advertising revenues for daily papers and 16% for community newspapers.

National advertising revenues are earned from national or regional campaigns. Local advertising revenues are from department stores, restaurants, specialty stores and supermarkets found in the community, as defined by the Canadian Newspaper Association.

Circulation revenues

Circulation revenue is the second-largest source of revenue for newspaper publishers, representing 17% of industry revenues. In recent years, competition from free news sources on the internet and from the growing number of free daily newspapers have contributed to a downward trend for print circulation figures among the paid daily newspapers. According to the Canadian Newspaper Association, average circulation among Canada’s paid daily newspapers decreased 1.0% in 2006, following decreases in each of the previous four years. ³ 

Circulation revenue was $862 million in 2006 compared to $850 million in 2005, an increase of 1.5%. The increase in 2006 is due in large part to changing accounting practices, as additional publishing firms switched to reporting gross circulation revenues instead of circulation revenues net of distribution expenses. This trend has contributed to increases in circulation revenues, operating revenues and operating expenses in each of the last three years. Price increases also contributed to the rise as newspaper prices rose 2.5%, as measured by the Consumer Price index. ⁴ 

The daily newspaper and community newspaper segments of the industry differ in the proportions of revenue earned from these two principal revenue streams. While both earn the majority of their revenue from advertising, the community newspaper industry is more heavily reliant on advertising as many of its newspapers are distributed free of charge. In 2006, community newspapers earned $29 in advertising revenue for every dollar of circulation revenue. By comparison, the proportion for daily newspapers was $3.50 in advertising revenues for each dollar of circulation revenue earned.

Advertising and circulation revenues can be earned from both print and online formats of newspapers.

Operating expenses

Operating expenses for the newspaper publishing industry rose to $4.63 billion in 2006 from $4.52 billion in 2005, a 2.6% increase that was equal to growth in operating revenues. Consequently, the operating profit margin for the industry held steady at 13.2%.

Roughly 39% of industry operating expenses were paid to employees in salaries, wages, and benefits, for a total of $1.83 billion in 2006 (40% in surveyed portion - see Chart 2). This was an increase of 3.6% from 2005.

Newspaper publishers may operate their own printing presses or outsource this work to another newspaper publisher or printing establishment. Printing costs, the sum of newsprint and contract printing expenses, held steady in 2006 despite a 1.8% increase in domestic newsprint prices. ⁵ 

Note(s):  Surveyed portion only.

Newspaper data by region

Industry performance in 2006 was a close reflection of regional economic performance, as publishers in the western provinces, and Alberta in particular, posted the highest revenue growth rates and profit margins.

Operating revenues for publishers in Western Canada (including territories) grew by 3.9%, nearly double the rate of 2.1% in Ontario and 2.0% in Quebec. Advertising revenues tend to be sensitive to prevailing economic conditions, and Alberta’s booming economy and growing population contributed to a 5.3% increase in industry operating revenues in 2006, driven by a 5.8% increase in advertising revenues. Operating revenue results in the Atlantic provinces were lower due in part to restructuring of printing operations that, for statistical purposes, were formerly included in publishing industry estimates.

Profit margins continued to be healthiest in Western Canada, rising from 18.2% in 2005 to 21.1% in 2006. Alberta again lead the way with an operating profit margin that leapt from 26.4% to 31.1% as publishers held operating expenses down, despite a 5.0% increase in salaries, wages and benefits. In contrast, profit margins in Ontario declined from 10.0% to 7.4% under the weight of a 5.1% increase in operating expenses. Publishers in Quebec and the Atlantic provinces posted profit margins of 13.5% and 12.3% respectively.