Monday, February 27, 2012

Newspaper News - Yes, It's That Bad

This is another devastating graph, summed up simply as "Newspaper Advertising Revenues Lowest in 60 Years."
The graph uses numbers from the Newspaper Association of America (NAA), through the third quarter of 2011, and adjusted for inflation (amounts in 2011 dollars).  The rapidity of the decline in the last few years reflects the combined effect of the recession with longer term trends.  2011 ad revenues of $21 billion were less than half of the $46 billion earned in 2007.  And even adding $1.6 billion in online ad revenues to that total brings total ad revenues just barely above total advertising revenue for 1954.
  As economics professor and blogger Mark J. Perry wrote -
It took 50 years to go from about $20 billion in annual newspaper ad revenue in 1950 (adjusted for inflation) to $63.5 billion in 2000, and then only 11 years to go from $63.5 billion back to about $20 billion in 2011.
I took a look at the raw NAA numbers, which provides a bit of a breakdown.  First, the only bright spot is online advertising- which has been growing at around 10% annually for the last two years (online revs fell in 2008 and 2009).  Even that, however, is well below the early 25-30% growth rates in 2003-2007.  Print advertising revenue streams dropped around 10% a year in 2010, 2011, with some variations in the three major categories (National, Retail, Classified) over that period.  Quarterly National revenue levels haven't shown a positive gain since 2004 - the last positive quarter for Retail and Classified ads were in 2006.  To some extent, these losses have been masked by circulation revenues, which have remained relatively stable over the last 10-15 years.  That despite the fact that newspaper readership, as a percentage of all adults, has fallen from 80% in 1964, to below 50% in 2006.  Even adding together print and various online edition readership for 2011, readership fell to 44% of all adults.
  Now, these are all industry totals - and I'd caution that most newspapers are still managing to eke out a profit, and that some sectors (rurals, weeklies, free papers) seem to be doing relatively well.  So, while I wouldn't proclaim the death of traditional newspapers, it's clearly an industry and market with issues that need to be addressed.

Sources: Newspaper Ad Revenues Fall to 60-yr Low in 2011Carpe Diem blog
Trends & Numbers Section, Newspaper Association of America website

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