Monday, March 19, 2012

"America's Fastest Shrinking Industry" - Newspapers

LinkedIn created an interesting graphic on industry outlooks, based on the most recent Council of Economic Advisors' Economic Report of the President.
If you look at the bottom left, in last place, you'll find the Newspaper Industry, with a reported shrinkage (in percentage of jobs) of -28.4% from 2007-2011.  At the opposite end are Online Publishing (3rd at +24.3%) and Internet (2nd at 24.6%).  And the decline is consistent, occurring even after the recession officially ended.
  The recent Newspaper Association of America numbers show that newspaper revenues have fallen by about half since 2005 (the report is discussed in more detail in a previous post), and if you control for inflation, 2011 revenues are the lowest since 1951.  While part of the decline in recent years has been a result of the recession, and the loss of several key advertising markets to online competition (classified ad and employment ad revenues have both dropped by more than 90% in the last decade), there's a more critical long-term problem.  Advertising rates, and revenues, are based on readership.  Newspaper readership dropped from 80% in 1964 to below 50% in 2006.  Even with combining print and online edition readership, newspapers reached less than 45% of U.S. adults in 2011.  Furthermore, the decline is generational, and so is likely to continue falling for a while.
  In the meantime, online advertising is booming, and is expected to pass total print advertising dollars this year in the U.S.  One market research firm even predicts that on a global basis, online advertising will surpass newspapers in advertising revenues in 2013.  And the growth in online revenues will continue to grow at a significantly higher rate than seen for other media; a wide variety of market forecasts has online advertising revenue approaching TV advertising (currently the highest) totals by 2020.
  Now one caution is that some of this depends on how you define "newspapers."  The largest urban dailies have the most revenues, subscribers, and employees - and they're the segment of the newspaper industry that is doing the poorest.  There are segments of the newspaper industry that are doing reasonably well (mostly smaller papers), and most of the industry remains profitable, although not at the levels experienced before 2000. 
  As in previous posts, I'll suggest that these results shouldn't spell the end for "newspapers."  At least not necessarily.  But between the higher revenue growth in online advertising, and recent research from Pew and others (see this earlier post)  suggesting that mobile devices might increase use of news sources, suggests that newspapers as news organizations may survive if they shift more of their focus to online news efforts, and do a better job of providing the kinds of information that people seek.

Sources: Newspapers America's Fastest Shrinking Industry, Breitbart Big Journalism blog
LinkedIn Industry Trends: Winners and Losers During the Great RecessionLinkIn Blog
US Online Spending to Surpass Print in 2012eMarketer


  1. America is amazing and wonderful country in all over the world. Its useful graphic of industrial out looks. Newspaper is great source of get all information and knowledge.

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  2. This isn't really that surprising. With all the blogs out, and the mobile RSS feed apps, it's no wonder newspaper readership and thus newspapers in general are dropping. The less people read, the less advertisers are apt to put their ads in the newspapers. If they don't put their ads in, the newspapers lose money. The way technology is moving, sure newspapers can go online, and maybe they will flourish there for years to come. But my feeling is that the blogs and other sites out there will soon put newspapers away for good, and the writers for newspapers will be dispersed to other news organizations or websites to write for them.

  3. It is truly unfortunate that newspapers are being pushed to the back burner, only to eventually fade out. They may not be completely gone in my life time, but eventually they will disappear. I'm currently interning at a local newspaper right now and I see how much stress is put on the employees because they all are expected to know and do much more now than in previous decades because the publication can't afford to hire more people for all the specific jobs. And yes, newspapers can still make money by charging small fees for an online PDF version of their product, but eventually all news"paper"s will basically become news websites, with many that have already made that transition.

  4. As stated above these facts do not have to mean the end of the newspaper industry. The television did not cause radio to go into extinction as many predicted it would and I do not think the internet will be the downfall of newspapers. For a newspaper to stay viable it must find a way to utilize multi-platform content dissemination. While obviously newspapers need to have effective web content, mobile friendly content and a presence on social media accounts the challenge that lies ahead for the companies will be to monetize their online and mobile content on a medium where audiences are used to having free content.

    Aside from my hopeful outlook of the newspaper future I found this article very telling about the state of the media business today:

    As told frequently by Dr. Swan: If you want to make money in this field, go into media sales.