The Sorry State of the Newspaper Industry: Advertising Income Fell 16.6% in 2008
The U.S. newspaper industry was already facing numerous challenges before the economy took a nosedive, but the latest data from the Newspaper Association of America shows that the current economic climate has only exacerbated the already dire state of the American newspaper industry. Specifically, total newspaper advertising revenue fell 16.6% in 2008. Classifieds advertising, which is under a lot of pressure from online ventures like Craigslist, fell almost 30%, and real estate classifieds fell 38%.
Thanks to the U.S. housing boom, real estate classifieds had been one of the most stable sources of advertising income for newspapers, with growth rates up to 30% in 2006. But now, even recruitment advertising, another income source newspapers used to be able to count on, fell a full 42% in 2008 (and more than 50% in the last quarter of 2008), as overall recruitment fell to record lows thanks to the state of the economy, and as both recruiters and job seekers moved online to advertise and search for jobs.
Indeed, the state of the newspaper industry has become so dire that U.S. Senator Benjamin Cardin introduced a bill on Tuesday that would grant non-profit status (and the tax breaks that come with it) to ailing newspapers to give them a chance to restructure their business.
Image credit: Trulia blog
Shutting Down the Presses
In the last couple of weeks, a growing number of newspapers have moved their businesses completely online. Just last week, the Seattle P-I announced that it was going to become an online-only publication with a reduced staff (and the latest data shows that the traffic on the site has actually gone down since then).
Laying Off Journalists
The New York Times, sold its venerable headquarters in a lease-back deal earlier this month and will now cut about 100 non-union, non-newsroom jobs. Last year, the Times already cut 100 of its 1332 newsroom jobs. This week, the company also announced that it also plans to cut salaries by 5%. The Houston Chronicle just laid off 12% of its staff - and the list of papers that have ceased publication on the Newspaper Death Watch blog continues to grow.
Note: we mistakenly reported that the times had laid off 100 newsroom workers this week, however, the Times only cut non-newsroom staff this week - most of the cuts in the news division happened last year and the Times actually promises that it will not lay off anymore newsroom staff this year (which, given the current situation, might be overly optimistic in our opinion).
The Breaking Point: Are We There Yet?
One thing is clear: a lot of newspaper are about to hit their breaking point. While there was already a trend towards online publications, the current economic climate is only accelerating this process. Gimmicky experiments like a custom newspaper that readers can print at home will do little to reverse this trend. Indeed, while some forms of printed newspapers (think free, fully advertising-financed newspapers distributed at train stations in Europe, for example) will most likely continue to be around for a while, the future of the industry is clearly online.
CC-licensed image used courtesy of Flickr user purdman1.
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Good piece, man. Scary stuff. Just today (Friday) DemocracyNow.org did something on the state of newspapers. I've recently bought a Kindle and (somewhat ironically) read all my news on it--but not from paid sources. I have a 3rd party app that pulls down news feeds off of the Internet and automatically syncs them to my Kindle. I was reading the Economist on the subway the other day. So, still... yikes!
Posted by: thepete
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March 27, 2009 11:26 PM
I don't agree with a bail out of sorts to help them support their business. I have been in the entertainment industry (music business) for years and saw how that industry literally ignored the factors of change.
The newspapers had a 7 year insight into this yet they did nothing! They argued that the money was still coming in as if they were the grasshopper talking to the ant (remember the old story?). They furthermore shunned growth and innovation by taking small steps to assure that their tradition would continue in the face of change.
In other words they sailed right in to the storm. I am not insensitive to the jobs involved. I am however saying that the employees must have seen change as well and yet they stayed. Even rats desert a sinking ship by instinct.
Some of you may argue that “well what else were they supposed to do?” as if they didn’t have choices over the last 7+ years. First every one of the columnist / writers could have developed blogs/following (some smart ones did and did it early). Photographers could have done the same as well as editors.
And Sales people? They could have worked at developing relationships and bring their main clients to the web in an entrepreneurial fashion. Nothing that would be against policy at the newspaper I am saying they should have left and raised alternative ships to jump on.
In a hurricane you have days to prepare it is unlike a tornado which is sudden. The industry and its employees had time to prepare more so than the auto industry. What would you do if you were told you could die in (7) years? Would you change?
Introduce a bill that allows journalist and other employees to create sole proprietorships or other companies. Or a bill that would train them to build a business on the web. Something that is aimed toward growth. Shut down most the presses and fulfill your minimum quotas. Concentrate on adding value via the web.
I lament the decline of newspapers, but what I lament happened a long time ago. Beginning in the 1970s the news industry lost its way as news agencies became corporations first and news-gatherers second. Or third. Then we lost competition among the wire services. It's funny, but I never noticed what was happening until I started news feeds on the Internet and realized that the *same* story was appearing in multiple places, my local newspaper included.
Over the last decade or two, meanwhile, the local paper got bought and re-bought in corporate mergers. They sacrificed local coverage for AP feeds. When I can get the exact same information over the Net, any time, in any depth, that I can get in my newspaper (time and depth decided for me), is there really any choice?
Suggesting that newspapers should have got on the Net bandwagon misses the point. It's not about the medium, it's about the news.
We are losing papers now. We lost news quite some time ago.
I do not want the newspaper industry to die but it seems that it is inevitable. Well, I think that a new model should emerge. Until now, newspapers had a website and soon some successful websites may have at least weekly magazines in print. Many people feel that Internet is the villain that is killing the newspaper industry. However, I like to differ. When cable TV was born, it was clear that the days of newspapers were getting numbered.
The future for news is online, where there is very little advertising revenue and even less money and time to do good work. I see.
when the people ready to completely living press no more touching the paper and ink,I believe there "press domination at the past need to be reconsidered as "old past history that is ended"because with the power press now already in the hand of "Google and Yahoo press- Company"
You know what occurs to me lately is that everyone views the current state of the "web" as the future. In reality tomorrows media future could even be less html oriented today. Who says todays blogs and web pages aren't replaced by interactive interfaces pumped directly to your television? UGC => TV => Consumer instead of UGC => Blog => Consumer.
Everyone views the web page as the "future" but the reality could be very different, very quickly. I hope everyone as content creators learns that lesson.
Good information.
In the present economic situation if you are looking to get your message across to people and advertising your business without spending loads of money, then you can opt for traditional outlets like print advertising agencies. These agencies can offer you classified ad space at special discounts. This is also a great opportunity especially if you are setting up a new business or are tight on your advertising budget.
When you use a professional ad agency, you tend to receive an early notice of the special offers and prices and also a considerable reduction in the advertising rate for national press. So help your business grow by promoting it in the low priced publications. Use print media to cut your costs and boost your advertising efforts in this growing economic recession.
Good information.
In the present economic situation if you are looking to get your message across to people and advertising your business without spending loads of money, then you can opt for traditional outlets like print advertising agencies. These agencies can offer you classified ad space at special discounts. This is also a great opportunity especially if you are setting up a new business or are tight on your advertising budget.
When you use a professional ad agency, you tend to receive an early notice of the special offers and prices and also a considerable reduction in the advertising rate for national press. So help your business grow by promoting it in the low priced publications. Use print media to cut your costs and boost your advertising efforts in this growing economic recession.
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I would certainly check a new Twitter account dedicated to this feed using Tweetie (it would simply be another one). Even better would be the ability to map Twitter accounts to the Facebook updates to strike up a conversation easily on Twitter too.
I've recently bought a Kindle and read all my news on it but not from paid sources. I have a 3rd party app that pulls down news feeds off of the Internet and automatically syncs them to my Kindle. I was reading the Economist on the subway the other day.
I just have to laugh when I read articles like this. The bias is quite clear. Have newspapers circulations declined? Yes, the "national" newspapers have lost numbers. But is you take a closer look and had a understanding you would see that the trend in not online but rather to smaller more regional newspapers.
Have newspapers taken a hit from media like the internet? Yes we have. But another thing that this author is not mentioning is that every form of media gas its pro's and cons, it is all just "horse of a different color". However, unlike any other media we can offer our advertisers a market penetration like no other media. Currently, we reach 63% of households in the market we serve. Other media's will tell you their number of listeners or viewers all day long, but who cares you want to know who is there when your commercial is on.
I could go on and on about this topic, but no. I will just leave it at this, it is important that when promoting your business you use the best media mix for the demographic you serve. Newspapers like all industries are in a period of transition, but when people want their local news from a trust worthy outlet they still come to the newspaper.
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unlike any other media we can offer our advertisers a market penetration like no other media. Currently, we reach 63% of households in the market we serve.
I don't even remember how many times I may have read the statements about how newspaper advertising is losing it's charm. As the times goes by, I am not sure if it true. Newspaper advertising is still as popular, maybe not as, but still somewhat. And it may take some good number of years to fully see them gone. Meanwhile, free classifieds are taking over fast.
There are still people who like to pick up the newspaper and read it. So, for those who are so used to reading the newspapers, advertising on the paper will keep happening.
The future for news is online, where there is very little advertising revenue and even less money and time to do good work. I see.
when the people ready to completely living press no more touching the paper and ink,I believe there "press domination at the past need to be reconsidered as "old past history that is ended"because with the power press now already in the hand of "Google and Yahoo press- Company"
The future for news is online, where there is very little advertising revenue and even less money and time to do good work. I see.
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I think there's alot more problems with the news/reporting/blogging on the 'net than the echo chamber, it has to do with *how* the news surfaces (Digg, Mixx, etc.) and the gaming that's typically involved in making someone/something relevant...
Finding strategic ways to work with offline and online material will ultimately be the only way to save niche newspaper services.
I do not want the newspaper industry to die but it seems that it is inevitable. Well, I think that a new model should emerge. Until now, newspapers had a website and soon some successful websites may have at least weekly magazines in print. Many people feel that Internet is the villain that is killing the newspaper industry. However, I like to differ. When cable TV was born, it was clear that the days of newspapers were getting numbered.
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