Newspapers are f’ed

Newspaper ad revenues have taken their worst drop in almost 60 years – worse even than 2001. E&P reports:

According to new data released by the Newspaper Association of America, total print advertising revenue in 2007 plunged 9.4% to $42 billion compared to 2006 — the most severe percent decline since the association started measuring advertising expenditures in 1950.

The drop-off points to an economic slowdown on top of the secular challenges faced by the industry. The second worst decline in advertising revenue occurred in 2001 when it fell 9.0%.

Total advertising revenue in 2007 — including online revenue — decreased 7.9% to $45.3 billion compared to the prior year.

There are signs that online revenue is beginning to slow as well. Internet ad revenue in 2007 grew 18.8% to $3.2 billion compared to 2006. In 2006, online ad revenue had soared 31.4% to $2.6 billion. In 2005, it jumped 31.4% to $2 billion.

As newspaper Web sites generate more advertising revenue, the growth rate naturally slows.

The NAA reported that online revenue now represents 7.5% of total newspaper ad revenue in 2007 compared to 5.7% in 2006.

That growth could not stave off the losses in the print however. National print advertising revenue dropped 6.7% to $7 billion last year. Retail slipped 5% to $21 billion. Classified plunged 16.5% to $14.1 billion.

“Even with the near-term challenges posed to print media by a more fragmented information environment and the economic headwinds facing all advertising media, newspapers publishers are continuing to drive strong revenue growth from their increasingly robust Web platforms,” John Sturm, president and CEO of the NAA, said in a statement.

Is that called whistling in the wind? Or pissing in it? Man, that’s denial.

Yes, some of this is as a result of the economic downturn, especially in real estate (and jobs will be next and cars after that and retail along for the ride down). But even when those segments rise again, newspapers will not — not — recover what they have lost. They lose doubly in a downturn: advertisers spend less because they have less and then they realize they can keep spending less. It’s a reverse plateau.

The situation is desperate.

  • DownriverDem

    One thing for sure is newspapers aren’t what they use to be. There is no indebt reporting. They just seem to take articles from other news service or cover fluff stuff. No wonder they are in trouble.

  • Oh, they’re in plenty of debt.

    (Sorry. Couldn’t resist the Freudian typo.)

  • Pingback: Ouch… : Tree of Knowledge()

  • The way we make and share news is changing so quickly that only the fleet of foot will survive. Fortunately for some newspapers the people and the tools are out there for them to do just that. Importantly saying “we’re not listening la la la” is not one of those tools.

  • Pingback: The future of newspapers (the real answer) |gangbuster()

  • Newspapers can still be saved.

    Hey, Look! You made our Swiggle cartoon today! :)

    Thanks for teaching me a new vocabulary word.

  • Ben

    What’s interesting is that 2001 was also the bubble when they were also killed. Guess it proves that newspapers are a ‘luxury’ item. How many newsrooms/reporters think this way? I agree w/ Jeff – how many people will cut it out of their life like TV, turn online, and realize they arent missing anything?

  • Pingback: Medieblogger » Jeff Jarvis: Aviserne komme ikke tilbage()

  • Pingback:   Newspapers are f’ed : freedompictures()

  • Pingback: Hyperlocal or bust. Time for newspapers to take the plunge before they go out of business entirely. « The Future of News()

  • Hey, DAWN! COOL site! Thanks for responding here – really!

    Yes, Jeff. Young-mod ad designer and I had a good laugh of agreement with you on this. Luckily, WE work in a time-bubble region of America that won’t be hit by this for at least another five years or so, to any serious extent.

    Definitely hitting the books on FLASH and PREMIERE this weekend…

  • The Project for Excellence in Journalism recently issued their 5th annual report of the State of the News Media. Their conclusion is, yes, news media is in trouble, more so than last year. In trying to explain why, they put together a list of trends, two of which are true not only for news media, but perhaps for all brands.

    ” News is shifting from being a product – today’s newspaper, Web site or newscast – to becoming a service – how can you help me, even empower me?” The other trend they identify is that news websites aren’t final destinations any more. They’re becoming gateways to other places, other information. They’re providing useful service.

    The trend of products becoming services is universal. In a shift so subtle and incremental that marketers are still trying to comprehend it, consumers have redefined their relationship to products. The technology tools that have empowered all of us have permanently changed our needs and expectations. Dialog, utility, interactive tools, and on-demand convenience are no longer optional. They’re the expected standard equipment.

    As marketers, I think we have to start considering that the question in most consumers’ minds isn’t “Is this product NEW and IMPROVED?”, but rather “What have you done for me lately?”

  • Fat Man

    Couldn’t happen to a nicer bunch of guys.

  • ZF

    This is like watching a nationalized industry after privatization.

    The ‘old guard’ doesn’t adapt to a competitive environment – both its customers (advertisers) and its consumers have to wait for them to retire. Until that happens it’s just one bad tempered debacle after another.

  • Well, when the “news product” for Americans is full of explicit or at least implicit anti-Americanism, with little or no relevant comparison to others, why should Americans be happy paying for it?

    Where are the pros and cons of alternate decisions? Lost in the polls, which are less than even opinion, mere feelings. Lost in the speculation about the future, rather than focusing on more current facts and speculating on current links.

    But who cares? I’m on the net, don’t need to buy newspapers anymore — so I don’t.

  • John Blake

    Tremendous opportunity here for uncensored, relatively complete and honest reporting, not “news” (sic) but valid vs. spurious factual updates in contemporary context with historical perspective.

    Never has worldwide culture, socio-economics, science and technology been more fast-paced, multi-faceted… yet never has informed public interest in crucial developments been so wretchedly ill-served. Paradoxically, individuals today have powerful means to blast fraudulent media misrepresentations at the root, should they so choose.

    Extreme discrepancies of fact with self-serving ideological fictions –“global warming”, militant jihadism, energy/population alarms– eventually confront brute realities of time-and-tide. Think Sarajevo, imagine Nazi or Soviet totalitarians possessing H-bombs c. 1943. Issues of like kind persist today. “What can I do?”– Adams, Jefferson, Tom Paine answered that.

    “Journalism” is a misnomer. Active, ongoing field-reports are like scouts reporting dispositions to Headquarters, spies relaying in-depth assessments to a General Staff. Deploy your left-wing, right-wing, center forces and reserves accordingly… who quails at action has lost his battle before any trumpet sounds.

  • Chuck

    I was a major consumer of their product for many years – I subscribed to two dailies (considered myself well-informed), plus used the want ads occasionally. Of course, I always did have those nagging doubts about the serious flaws in many articles covering fields with which I was familiar (was it only in those fields that they were so bad?), and many articles having serious innumeracy evident… I thought I was just hypercritical.

    Then I got Internet access about eleven years ago, and found out that the newspapers really were a rather poor (what, no hyperlink to the source?) and often blatantly biased product, and one that left a pile of residue in my house after reading. The only newspapers I’ve read in seven or eight years now are the ones left behind in fast-food places, and as they haven’t improved any (to be honest, they seem worse than I recalled), I can’t imagine I’ll ever subscribe to one again. I suspect I’m not alone.

    I’m one of the people who likes to read and was in the habit of grabbing the newspaper every morning – if they can’t get that demographic to buy and read their product, who will?

  • redherkey

    In a sense, the condition of many of the daily newspapers is akin to the condition of the Czar of Russia and his elite circle as the peasantry rebelled and encircled the compound of the out-of-touch nobility.

    In Omaha Nebraska, the Omaha World Herald still parades its role as the gossip rag for the social elites. The great kingdom of Quiveria, the Knights of Aksarben and countless other social events of the old money elites dominate the paper’s pages, to the complete disinterest of most of the population. The paper still treats a land-grant university campus 60 miles away (which its old money ownership attended) as the home school, while ignoring the leading and growing business university with a division one hockey team in its own community. Expect UNOmaha coverage to be buried or forgotten, while loser Husker basketball stories will hold up the presses. Favored old Omaha businesses run by the inner circle are given consistent front-page coverage. Exciting new firms are ignored (unless advertising can be arranged).

    Its web effort is fraught with pop-ups and links to malicious software, including popups that misleadingly claim infections and lead less sophisticated users into clicking on them for treatment, only to bring more adware and malware into their PC. Confronted with this activity, the company denied having any popups and blamed the occurrence on users Internet providers. One employee confessed that the need for revenue is so bad that full reign is given to the popup providers.

    In many cases, these are tired companies that have run their course. Like they NYTimes, they’re focused on parading their historical legacy rather than breaking great stories of community interest. They reflect on greater days from achievements long forgotten. They’re long past catching up on innovation – life has passed them by. Best to thank them for their service and close the chapter on their era rather than perpetuate a failed cause.

  • Pingback: Notes from a Teacher: Mark on Media » Friday squibs()

  • Pingback: Dawn Douglass And Swiggle | How To Split An Atom()

  • kcom

    At one time, I fully expected to have a subscription to TIME magazine for the rest of my adult life. The last one I had I got for free through a magazine thing (through points on a credit card or something). When it expired I didn’t pay for a renewal and when they kept sending me notices I finally wrote back and told them I didn’t want a subscription to their magazine any more – even for free. I just don’t trust their product any more and I’m certainly not going to reward it financially.

    I don’t admire the bias and self-congratulation in much of modern journalism, and even where it’s not biased it’s frequently shallow and petty. The bubble of “professionalism” burst for me a long time ago.

  • There are still really “generous” people out there. My bosses just spent $15,000 on classified ads purchased through our ad agency.

    I would have paid 100 trusted people $100 dollars each to send referrals, then a $5K bonus for the one who sent a keeper. Plus a Craigslist ad. That probably would have produced a really scary-good candidate.

  • Sorry, I should have said it was for a “Help Wanted” ad.

  • Tex Lovera

    Why the hell would anyone read my local paper? They are consistently:

    1) anti-American
    2) anti-conservative
    3) anti-male
    4) pro-union
    5) supportive of our local Democrat-dominated local government, populated by two warring factions of complete tax-and-spend idiots who are watching the population run away.

    The funniest thing? They just recently entered into some type of “partnership” with Monster for help-wanted ads. I wonder how much they PAID Monster to try and ride their coattails?

    When they disappear, they will not be missed…

  • Please, no one is valuing the incremental uses:

    Useful in puppy training

    Keeps the recyclers busy/employed

    For that matter the paper industry too (and, hey, truckers)

    Decent packing material

    Cleans glass

    Protection when painting

    Paper mache

    Good in time capsules

    Decent mulch

    Um, provides the news that we read online.

  • @Linda and Chuck: you ARE the product. The product of any newspaper, website, etc. is the readership (viewership, audience, etc.) which the news outfit then sells to advertisers. It’s always been that way. And for any content provider, it will always be that way.

    What marketers need to figure out is, if the readership is moving online, why aren’t the ad dollars moving there (as quickly) too?

    One reason is that banner ads suck bone, and that’s where the focus has been. Marketers and salespeople need to get off their asses and figure that out.

    Or let Google figure it out for you.

  • There are none so blind as those who will not see.

    Give me three years (and complete control) and I could make the POS Denver Post into a great and profitable newspaper.

    It’s currently a cluttered, biased AP reprinter. That’s fixable.

    First day: Gather all the reporters into a room (rent the convention center next door if necessary) and ask everyone who is a reporter “to make a difference” to raise their hand. Fire everyone with their hand up.

  • It’s hard to put this into perspective when you take newspapers alone. What about magazines? Is the decline there any less dramatic? Even more to the point, are book sales down? How about the audio-book industry, or other forms of print? I think this kind of data might help to understand what’s really going on.

  • Paddy

    The Seattle Times is self-destructing. The family ownership and management keep turning further left with their product. It has become a terrible newspaper.

    I have a recurring dream. The ST value keeps diminishing to the point that the only buyer is Rupert Murdoch’s News Corp. Of course he buys ST for a fire sale price. This is poetic justice.

  • All newspapers are afternoon newspapers now. But that’s not always fatal. There are still afternoon newspapers that perk along, doing what only they can do. They’re modest operations in small towns and rural areas. Through most of our nation’s history, we did not turn to Wall Street to provide our news. The Wall Street-owned metropolitan newspaper might not survive on paper, but family-owned or employee-owned papers with modest profits, plus suburban weeklies, shoppers or coupon books will still be around. Politicized newspapers might also thrive, like the legendary Dacron Democrat-Republican before it merged. Buzzmachine readers seem to want a center-right Daily Mark Steyn, which is not a bad idea actually, but others will want The Daily Olbermann. Or The Obaman or The Clintonian.

    Somebody will publish a modest newspaper for people who still want to sit down and pick up a paper. As someone who’s totally wired, and wireless, and spends all day in front of a screen, I know there are many people who don’t live like that. I try to keep that in mind. A poll of Buzzmachine readers about paper would be like a poll of bicyclists about SUVs.

  • Pingback: Traditional media in a downturn or downward spiral? « Randy Holloway Unfiltered()

  • “mrsizer” wins the thread.

    I pay big money to watch a scene like that.

    “You’re *fired*. You have five minutes to get out of my building or I’ll *bounce* you out like flat basketballs.”

  • Productivity.

    Economic definition is income per capita. To compare online and print media, calculate revenues per reporter after deducting print and circulation costs. If newspapers can’t compete on productivity, then paper will disappear – regardless of the preferences of die-hard subscribers.

    Online publishers need to earn higher eCPM. Print publishers continue to squeeze costs. Newspapers are f’ed

  • Pingback: Quote by BuzzMachine » Blog Archive » Newspapers are f’ed | Oliver's Stuff()

  • Trump

    This is objectively fantastic news. Lets get these useless, biased hacks at the NYT and other print rags out of a job.

  • Greg Andrew

    The newspaper industry finds itself in this mess because of the fact that most newspapers haven’t had serious competition in decades. In an effort to capture as many readers as possible, newspapers made themselves dull in the name of “unbiased” news. But, as is usually the case, when you try so hard not to offend anyone, you make a product that people just don’t care about. These policies have ensured that few feel a strong connection to their daily newspaper, and so most are willing to give it up when alternatives arise.

    Even now, it seems few in the industry get this. I haven’t heard of a single newspaper that has reacted to this crisis by creating a product that more readers will be passionate about. Instead, they make cuts and fill the paper with more AP stories and local news that no one wants to read about (crime, fires, etc.).

    There are other issues, of course, but if there’s no strong bond between a newspaper and a good size portion of its readers, the rest is moot.

  • Pingback: Imprensa: morte (e ressurreição?) « Jornalismo e Comunicação()

  • If this isn’t a wake up call for the Newspapers in the UK and not sure what is!?

    The model of delivering news and therefore it’s revenue streams are changing. The public’s appetite for news (either side of the pond) will never cease, so news sources will live on (perhaps the paper will be dropped from Newspaper.)

    I think that we are a tipping point in the “media” as a whole. Large multinational news organisations will have to change fast and diversify if they are to keep pace.

    The trend in the UK of large news groups such as Trinity Mirror, Northclife and News Quest who own 80% of the regional press (and turn out a singluarly onesided view of events) will come to an end, as revenues disapear to online blogs / sites and specialist TV sites, who fill the void and provide up to the minute news.

    Listen to the winds of change…..

  • Julie

    Have you seen this?
    A bit extreme? Another approach?

  • Pingback: » Print-omzetdaling Amerikaanse kranten stort in 30-03-2008 RethinkingMedia()

  • Pingback: Conversations: Am I Missing Something? Help! : MultimediaShooter()

  • Pingback: A Photo Editor - Newspapers and Bloggers()

  • Pingback: BuzzMachine » Blog Archive » Do I smell smoke? Is that a fiddle I hear?()

  • Pingback: How to keep the fire burning- Guidelines for the future of newspapers « O Lago | The Lake()

  • Hey Jeff,

    how about linking to the report.

  • Pingback: Como manter a chama viva - Linhas de orientação para o futuro dos jornais « O Lago | The Lake()

  • Pingback: ≈ Relations › Newspapers gone wild - Behavioral targeting protected by first amendment()

  • Pingback: The TR: It's 3 a.m., and will the phone please shut up already « The Turner Report Blog()

  • Pingback: Um devaneio pessoal sobre o futuro dos jornais « SummerJOL 08()

  • Pingback: jennifer crakow » Blog Archive » links for 2008-03-30()

  • Eve

    I agree with Ben above that if people loose newspapers they will wonder why they needed them in the first place. They are as out of sync with the modern world as ol’ time radio shows that were made ‘passe’ by TV and TV has succumbed, or will succumb, to the internet, given about twenty or fewer years…