The Fairfax Media Limited (ASX: FXJ) share price is down 1.9% today to 79.5 cents, after the media group announced big falls in publishing revenues across both metro and community media and in New Zealand.

Revenues for the first 17 weeks of the second half of the 2016 financial year (FY16 2H) for the group as a whole is down 2 to 3% compared to last year.

  • In Metro Media, publishing revenues are down around 6%
  • Australian Community Media is down around 13%
  • New Zealand is down around 10% in local currency (15% in Australian dollars)

The good news is that Macquarie Media Ltd (ASX: MRN) – the radio network in which Fairfax owns 54.5% of – has seen revenues rise around 49% over last year – although last year had a number of changes.

Domain, the real estate classifieds business continues to prop up the performance of the wider Fairfax Group. Overall revenues are up around 9%, with total digital business up 19% and domain.com.au up 23%.

That shows that Domain is becoming a much more effective competitor to REA Group Ltd’s (ASX: REA) realestate.com.au – mainly thanks to the $150 million Fairfax has invested in the portal over the past four years – resulting in revenues almost doubling over that same period.

REA reported 20% growth in the March quarter overall – however, that includes all its businesses including the international ones.

Old media, new digital

Fairfax’s results again show that the slow death of newspaper publishing continues unabated. Fairfax itself has admitted that the seven-day-a-week publishing model is dead, and will give way to either weekend-only or more targeted printing for most publishers.

But the company is successfully transitioning away from that business. Stan, the subscription video on demand (SVOD) rival to Netflix and a joint venture between Fairfax and Nine Entertainment Holdings Co Ltd (ASX: NEC), will exceed 500,000 active subscribers this month. The service is currently expected to reach cash flow breakeven during the 2018 financial year.

Foolish takeaway

While publishing remains a core component of Fairfax’s business, digital revenues are growing strongly, but until they become the dominant factor, Fairfax’s overall revenues are more likely to continue falling.

For investors, Domain is almost as valuable as the whole company, with the other business thrown in for free, which could make Fairfax a tempting investment.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.