The incredible shrinking newspaper

Even as a Wachovia analyst predicted that newspaper print advertising would fall 12 percent this year — falling 10.4 percent overall this year and falling another 6.5 percent next year — reality caught up to and ran past the prediction as the Newspaper Association of America said newspaper ad revenue fell 14 percent in the first quarter overall and 35 percent in job and real estate classifieds. Jon Fine, as I pointed out in the post below, summarizes the shrinkage of newspapers. The other day, he quoted newspaper owner Dean Singleton’s sober state of the U.S. industry: “By my estimate, as many as 19 of the top 50 metro newspapers in America are losing money today, and that number will continue to grow. The large metros are the hardest hit by change, and they’re the most difficult to change.” Nothing new here. The alarm bell just got louder.

  • It seems that when an old business model no longer works then it is time to consider a new one.

    I understand all the prodding about use of online media, interactivity and the like that is promoted on this site, but I think newspapers still fall into a different category.

    I see several unique features.
    1. A daily print product
    2. An expectation that they will “report” news not just retransmit it from elsewhere
    3. An expectation that their articles will be better vetted than what is becoming the norm on more nimble sites
    4. An expectation that these articles will remain as a permanent source of reference to maintain a history of the society.

    The business model has been to finance these tasks through the sale of advertising and revenue from the sale of the paper.

    Now every one of the features that I listed can be done without the use of paper and perhaps the improvement in ebooks will eliminate this aspect as well, but so far there are no online sites with the reputation of long running newspapers.

    So the weak link is the advertising. I have no idea what a newspaper operation would look like that didn’t depend upon advertising, but I don’t see anyone speculating on this either. The only obvious example we have is the BBC which is funded by a tax and doesn’t have the printing expense.

    All the innovation these days is going into finding ways to deliver more ads to viewers and into making them more irresistible. Time for a bit of thinking outside the box I think.

    I understand this may not suit Jeff Jarvis’s entrepreneurial mindset, but one size does not have to fit all. We do have non-profits operating along side for-profit firms in this word, sometimes even doing overlapping tasks.

    It seems the advertising model is getting pushed about as far as it can go. Doesn’t it lose its impact when every square inch and second of the public space is covered with promotions?

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