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March 26, 2010

The Dire State of the Newspaper Industry

   I've had many coversations with my friend Matt talking about the decline of printed news.  I subscribe to a newspaper, but the only reason is that I want the coupons included in the Sunday edition.  I pull those out on Sunday morning and the rest go to recycling without having been read.  It was cheaper to get a 4 day per week subscription for a year than to just buy the Sunday edition from the box down the street. 

   Like most people my age (I'm about to turn 30), I get the majority of my news from internet news sites, both network sites and independent news sites, and also from blogs.  I also scan the cable news networks depending on my mood.  The idea of spending money for a newspaper to actually get news seems bizarre to me, because everything I see in the paper, I already saw online yesterday or last week!  One of the blogs I subscribe to is Mashable.  They had a great article outlining the decline of the printed news outlets and showing the actual numbers.  The entire article can be found below. 

   Seeing things like this, and  knowing that most of the younger generations are increasingly using internet as their primary news source, I can't understand how companies like Newscorp - owned by Rupert Murdoch - plan to start charging for access to their news sites.  In all my conversations, people never come to the conclusion that they will start paying...they say they will get their news from somewhere else.  Blogs and independent news sites are going to become ever increasing players in this game.  I'll be interested to see what happens to print news in the next decade. 

   What do you think?  Do you read newspapers or magazines?  Where does the bulk of your information come from?  Would you pay for access to news sites?  Leave comments with your thoughts.

The Dire State of the Newspaper Industry [STATS]: "
We’ve known for a long time that the newspaper industry as we know it is dying. The shift from print to online has been a painful process — but just how painful has it been?
On Wednesday, the Newspaper Association of America released its estimates for advertising revenue across the newspaper industry. The numbers for 2009 were nothing short of disastrous, once again bringing up a very tough question: Can newspapers find a way to survive?
Let’s dive into the numbers.

A 44.24% Fall from Grace

In 2009, newspapers made $27.564 billion in total advertising revenue. As a whole, they generated $24.821 in print revenue, while the rest ($2.743 billion) came from online advertising.
Those numbers are indeed big, but when you put them in context, they are simply bad. In 2008, newspapers made $37.848 billion. Yes, they made a full $10 billion more last year than they did this year, a staggering drop of 27.2%. Nearly all of that loss was from print: Newspapers made $34.74 billion in print advertising in 2008, while they only accumulated $24.821 billion in 2009.
The story’s even worse when you go farther back into newspaper advertising history. Let me outline just how far newspapers have fallen:
  • In 2000, newspapers peaked at $48.67 billion in revenue. This came entirely from print — the NAA did not track online ad revenue at that time, but we can assume it was a minuscule number.
  • In 2001, it started dropping. Revenues dropped from $48.67 billion to $44.305 billion, a 9% decrease year-over-year. This was during the time of the Dot Com Bust and the related recession, so this is no big surprise.
  • During 2002-2006, print advertising revenues hovered between $44 and $47 billion.
  • Around this time, the NAA also began tracking online ad revenue. At the peak in 2005, combined ad revenue reached $49.435 billion, with $2.027 billion of it coming from online sales
  • Then the floor completely caved in. In 2006, newspapers made $49.275 billion in total revenue. In 2007, it was $45.375 billion. In 2008, it dropped to $37.848 billion. In 2009, it plummeted all the way to $27.564 billion. In four years, newspaper ad revenue dropped by 44.24%. That’s nearly half of the industry’s revenue.
I have included the full spreadsheet at the end of this post.

Journalism Isn’t Dead; It’s Evolving

The numbers speak for themselves: The old newspaper model is simply not going to be market-viable as we head deeper in the digital age. News blogs (such as Mashable) and online reporting are the future of journalism.
That doesn’t mean that newspapers should simply give up and die. There are many things that newspapers can do to avoid extinction. The ones that embrace the online space faster and more effectively have the best chance for survival.
As for young minds fresh out of journalism school — journalism is not dead, it is just evolving. Blogs and online publications are growing, providing a new and exciting medium for reporting on the day’s news. Social media is already becoming integral to the new era of journalism, and is something journalists young and old should not ignore.


Jennifer Hamilton said...

I LOVE to sit and read the paper. It's one of my favorite morning rituals. Sit with a cup of coffee and browse through...I'll be sad if they go away altogether. I hate reading things online. It hurts my eyes.