Free Markets, Free People
Editor and Publisher: “Sky isn’t falling as fast as you might think; ignore chunks coming through ceiling around you”
The newspaper industry loves dramatic headlines. At least, until they’re looking at their own problems. Then it’s time to look for a silver lining, even if it’s a pretty tarnished one. So here’s the headline for the Editor and Publisher article that tells us that circulation for newspapers, which fell 10.6% last year, fell again this year by 8.6%:
Like Newspaper Revenue, Decline in Circ Shows Signs of Slowing
I guess the good news is that instead of plunging to oblivion immediately, they’re merely on a rapid glide path towards it, with no noticable prospect of reversing course. For any other industry or trend (e.g. global warming), I’m guessing we would see somewhat more dramatic headlines.
Newspapers are high-volume businesses. As a whole lot of newspapers in medium-to-large cities discovered in the last twenty years, it isn’t necessary to lose all, or even most, of your subscribers to become non-viable as a business. A certain reasonably sized subscriber base is required to sustain a large staff, a huge printing press facility, and a distribution network.
So how much more loss on top of the 20% in the last two years will it take for the major to start imploding? I don’t know, but it’s hard to see how they can tolerate more than four or five more years of that type of decline with anything like their current business model.
But they’re determined to find good news:
And newspapers — including some that reported big declines in print paid circ — showed significant growth when print and online audiences are combined.
OK, but for any major newspaper that doesn’t have “Wall Street” in its name, there’s no direct revenue from online “circulation”, and any advertising money from an on-line presence is a small fraction of the advertising revenue in print publication. Nobody except Google has figured out a way to turn online content into significant revenue, and it seems pretty unlikely that stodgy newspapers will be the ones to do it.
For those just tuning in, the basics for these guys are absolutely horrible. Traditionally, the biggest chunks of their print advertising revenue include:
- Movie listings
- Automotive dealership ads
- Retail chain ads
Now lets take these one at a time. Classifieds have almost been destroyed by Craigslist. Teenagers would no more think of buying a newspaper to check movie listings than they would consider buying a leisure suit. Car sales are down, we don’t know when they’re coming back, and that entire industry is going through a re-structuring. Retail is in turmoil, as shown by the vaporization of Circuit City, Linens and Things, Media Play, S&K Menswear, and others.
It looks unlikely that any one of these four will get significantly better as revenue sources for newspapers. The top two are gone for good. I suppose the last two might stabilize if the economy improves, though I certainly would bet on merely slower declines instead of increases.
Newspapers also have the same problem as broadcast news programs: an aging customer base. Young people are shifting their reading habits away from print publications in general and newspapers in particular. This has been going on a while, and in the absence of all other factors presages a decline to irrelevance for print pubs.
That doesn’t even touch on the ongoing drop in quality and increase in bias many of us see in newspapers. I used to occasionally actually put money in a rack for USA Today. No more. I see it in hotels a few times a year, and it’s just awful. I’m considering stopping reading it even when it’s free because it’s just a waste of time.
It’s interesting, in fact, to note that the only major newspaper with a small increase in circulation was the Wall Street Journal. I don’t consider the WSJ to have gold-plated quality, but they at least try to do some in-depth work and not be totally blinded by their biases.
As a counterpoint, the very liberal San Francisco Chronicle has the largest percentage drop among the majors, down 22.68% in one year! Another year or two like this, and San Francisco will be left with no significant daily newspaper. That is, unless the Chronicle just does the same thing as the other majors in the Bay area and combines with the San Jose Mercury News:
There was a new kid in the top 10 as the San Jose Mercury News posted a weekday circulation of 516,701 by incorporating the Oakland Tribune and Contra Costa Times as editions of the Mercury News.
For those of us who love to beat up the majors for incompetence and biased reporting, take note: indulge while you can. With numbers like these, who knows how long it will last.