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Reach PLC Blames Facebook’s News Pullback for Drop in Digital Revenues

Reach, the UKÔÇÖs largest commercial news publisher with titles such as the Mirror and Express, has experienced a decline in digital revenues in the first half of the year. The company attributed this decline to a strategic decision by Facebook to pull back from news.

In the first half of the year, Reach’s pre-tax profits fell to ┬ú6.7mn from ┬ú32mn in the same period last year. Revenues also dropped by ┬ú18mn, or 6.1 per cent, with print down 2.7 per cent and digital revenue down 16.1 per cent.

The publisher cited “significant external headwinds” that increased operating costs and suppressed revenue growth. One of the factors affecting digital sales was a decrease in traffic following changes to Facebook’s news feed, including the shutdown of Instant Articles. This mobile-friendly format, which allowed news articles to load quickly on the Facebook app, contributed to a “significant decrease” in readers referred to Reach’s news websites.

Page views during the first half of the year fell by 16 per cent, but excluding Facebook-related traffic, the decline was only 2 per cent. Reach stated that this decrease in page views was a significant driver of the decline in digital revenue during this period.

Chief executive Jim Mullen acknowledged that digital growth was affected by lower referral traffic across the sector, primarily after Facebook deprioritized news content. Despite this, Mullen highlighted the resilience and predictability of Reach’s print business, which has supported investments in its digital products. Circulation revenue grew, and newsprint costs have started to decline as energy prices stabilized.

With cost savings expected to improve Reach’s financial position in the second half of the year, the company anticipates that full-year profits for 2023 will align with market consensus. As a result, Reach’s shares rose by 16 per cent on Tuesday, and the company maintained its dividend plans.

Analysts noted that Reach was more affected by Meta’s decision to shut down Instant Articles compared to other publishers. While many publishers had already abandoned the format due to lower monetization, Reach continued to benefit from using the tools to increase audiences.

To adapt to changing trends, Reach is exploring the use of artificial intelligence (AI) in its ad tech, product, and editorial teams. The company has conducted several pilot initiatives using AI to produce approximately 150 articles. These articles were then reviewed by Reach’s editorial team, with disclaimers clarifying when AI tools were involved in creating the content.

Regarding the potential acquisition of the Telegraph, which is currently up for sale, CEO Jim Mullen declined to comment on Reach’s interest in bidding for the newspaper.

How AI legalese decoder Can Help

The AI legalese decoder can assist Reach PLC in navigating the legal landscape surrounding its digital revenues and Facebook’s decision to pull back from news. By utilizing AI technology, Reach can analyze and interpret complex legal documents, contracts, and terms of service related to its relationship with Facebook. The AI legalese decoder can quickly identify key points, risks, and potential opportunities within these documents, helping Reach make informed decisions and develop effective strategies to mitigate any negative impacts. Additionally, the AI legalese decoder can aid Reach in identifying legal implications and obligations associated with its use of AI in ad tech, product development, and editorial processes. This tool enables Reach to ensure compliance with relevant regulations and reduce legal risks, ultimately supporting the company in achieving its financial objectives.

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