BellSouth downsizing squeezes phone books
Atlanta Business Chronicle - by Jim Lovel
Atlanta isn't shrinking. It just seems that way from the new BellSouth telephone book.
The five-volume set of books being delivered by the company this month has 21 percent fewer pages than last year, dropping to 5,288 from 6,727. That's despite a 2 percent increase in the number of residential and business listings.
BellSouth got more listings into less space by compressing the type, basically eliminating the white space between the letters, without reducing the size of the letters. The type in the Atlanta phone book already is the smallest BellSouth uses in any of its books.
Atlanta is one of four cities where BellSouth Corp. (NYSE: BLS) is using the technology to reduce the size of its telephone books and the related expense of producing them. The company used the compressed type for phone books in Miami; West Palm Beach, Fla.; and Charlotte, N.C., earlier this year, said Terrie Hudson, director of operations support for BellSouth Advertising & Publishing Corp., the BellSouth subsidiary that produces the books.
BellSouth also has reduced the size of the print in directories throughout Georgia and many of the other more than 500 directories it publishes in nine states.
The changes are saving the company money, although company officials won't disclose the exact amount. They prefer to discuss the savings in terms of the 255,000 trees and 50,000 cubic yards of landfill space the smaller books will save annually.
The advertising and publishing division of BellSouth, which includes its telephone book printing and yellow pages advertising business, produces about 8 percent of BellSouth's total revenue. The division earned $637 million on total revenue of $2.18 billion last year, a 14.6 percent increase from the previous year.
The division's earnings began faltering in the second quarter of this year. After an increase of 45.7 percent in net income in the first quarter, earnings dropped by 1 percent in the second quarter and 12.7 percent in the third quarter when compared with the quarterly earnings of last year.
The decline in advertising that has plagued the rest of the publishing industry is affecting BellSouth's yellow pages business, the main source of revenue for the company's advertising and publishing division, said Jeff Kagan, an independent telecommunications analyst in Atlanta.
"It's a business model that is facing some stress," Kagan said. "It's financially healthy, but it isn't growing."
BellSouth is responding to the loss of advertising revenue as other publications have by reducing the number of pages it prints, he said.
"It can provide significant savings," he said. "Less paper means less money."
Nationally, yellow pages advertising provides about $13.2 billion to telephone book publishers, said Christopher Bacey, a spokesman for the Yellow Pages Publisher Association, the trade organization that represents the more than 6,000 companies that publish yellow pages.
The revenue has increased by an average of about 5 percent annually since 1996, Bacey said. Although research by the association predicts that growth will be less than 3 percent this year, yellow pages are still popular while other forms of advertising are declining, he said.
"The yellow pages are holding their own," he said. "Advertisers are returning to more traditional forms of advertising."
Growth of the yellow pages advertising business has been hurt by access to yellow page listings over the Internet, Bacey said. The online listings, available through such Internet companies as Yahoo! Inc. (Nasdaq: YHOO), provide the information without the display advertising. BellSouth is among the companies that provide that information to the Internet services.
BellSouth doesn't disclose the revenue from its yellow pages business but acknowledges that it has declined this year. The two volumes of yellow pages the company publishes for metro Atlanta are 255 pages smaller than last year, about an 11 percent decline, even without compressing the type.
"Businesses are not advertising as much," said Lynn Bress, a BellSouth spokesperson.
There are still signs of growth in the Atlanta business community, though. The number of business listings increased by 2 percent. The directory lists 278,276 metro Atlanta businesses, up from 272,936 listings last year. However, the business white pages listings dropped to 720 pages, down 22.5 percent from the 928 pages published last year.
The biggest reduction was in the number of pages for residential listings, which dropped to 2,536 pages from 3,512 pages last year, a 28 percent decline. The number of residential listings increased to 1,568,978 from 1,543,823 last year.
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