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Monthly Archives: November 2012


Where will newspaper circulation and influence be in 2016?

Given the pathetic performance of our media during the Benghazi tragedy/debacle, I’ve been wondering just what will happen to the media before the next election after this one. I decided to look at where they were a couple of cycles ago, to get some historical perspective. I thought QandO readers might be interested in the results and my own speculations.

I had seen this article in the Washington Post a few days ago, giving circulation of the top 25 newspapers. I found another source showing circulation of the top 100 newspapers in 2004. So I fired up Excel and entered the top 15 from 2004 to see where they are now, and also noted the new members of the top 15 that were not there in 2004.

One adjustment was called for. I restricted the comparison to print copies. I’m assuming the 2004 figures were only print copies, or that web “copies” were insignificant. However, the Post reported circulation for 2012 with print and web combined, though they did note the web number. So the spreadsheet subtracted web circulation from total circulation to get print circulation.

Here are the results, with percentage increase or decrease in print circulation calculated. Almost all “decrease”, as you shall see.

 

Newspaper

Gross 2012

Web 2012

Net Print 2012

2004

%+- for 2012

USA Today

1713833

86307

1627526

2192098

-25.7549

WSJ

2293798

794594

1499204

2101017

-28.6439

NYT

1613865

896352

717513

1119027

-35.8806

LA Times

641369

151577

489792

983727

-50.2106

Wash Post

462228

27535

434693

760034

-42.8061

NY Daily News

535875

146605

389270

712671

-45.3787

NY Post

522868

178113

344755

642844

-46.3703

Chicago Tribune

411960

23112

388848

603315

-35.5481

Newsday

392989

114620

278369

553117

-49.6727

Houston Chronicle

325814

91331

234483

549300

-57.3124

Dallas Morning News

410130

64788

345342

528379

-34.6412

SF Chronicle*

229176

0

229176

499008

-54.0737

Arizona Republic

275622

839

274783

466926

-41.1506

Chicago Sun-Times

432455

70932

361523

453757

-20.3267

Boston Globe

230351

49432

180919

446241

-59.4571

     

 

New in top 15:

   

 

Denver Post

412669

176446

236223

340169

-30.5572

Tampa Bay Times

313003

13610

299393

348502

-14.0915

San Jose Mercury News

529999

43318

486681

279539

74.10129

* SF Chronicle dropped out of the top 25, so circulation was obtained from another web source.

This table isn’t really fair to newspapers that are making decent money through their web versions, but from what I can tell, that group has one member among the majors: the Wall Street Journal. NYT is the other major with a decent paid web subscription, but they won’t talk about their web financials anywhere I can find, which tells me the web is probably losing money for them.

WSJ and NYT also share the distinction that, if you include their web numbers, circulation has gone up instead of down. However, I found out that the Times has stalled in their monthly unique visitors. They were passed last year by the Huffington Post. So while the web has helped stem the decline in NYT readership, it won’t continue to do so unless they can get their web numbers increasing again.

I can’t find a reliable source that tells how much the other top newspapers really make through the web, either in circulation fees or in advertising, but I’m guessing it is a small fraction of what they made on the equivalent “circulation” in print in 2004.

So, just looking at print, and assuming revenue from the web is way less than revenue from equivalent print subscriptions, these guys are hurting. There is only one legitimate success story in the bunch: the San Jose Mercury News. Everyone else had gone down, with several losing over half their circulation in just eight years. The Tampa Bay Times managed to break in the top fifteen by merely losing fewer readers than any 2004 top 15 member.

Even among the ones towards the top, the signs of their distress are clear. I see USA Today when I’m on the road because many hotels give it away free. I rather doubt that this is a high-profit distribution for USA Today, and I’ve watched the daily edition get steadily thinner and thinner in the last few years. I don’t have actual numbers, but I think it’s at least one-third smaller than it was eight years ago. If they didn’t have one of the most comprehensive sports sections in the country, I think they would be even worse off.

The legacy press is driving on fumes. Over and above their shattered credibility, or in some respects because of it, their economic model is stressed to the breaking point.

So where will they be in 2016? I think the NYT and WSJ will tread water, the WSJ because they have a reasonably viable economic model and have not totally squandered their credibility, and the NYT because the left simply won’t let them sink.

The others, though, have a more chancy outlook. USA Today looks vulnerable to me, because it looks like the easiest national newspaper to replace with a web-based aggregation app. They do very little original reporting except for the sports section. They have not yet ramped up a decent web presence, and it’s pretty late in that game. I’ve noticed that fewer hotels have it than I used to see. I was in two hotels in Pittsburgh a couple of weeks ago, and neither of them had it.

The Washington Post looks vulnerable too. It also has limited web presence, and print circulation is down a staggering 40%+ in eight years. With their concentration on politics, the operating model of the Post requires a certain level of spending to maintain. If they drop much further, they simply might not be able to be viable on the newspaper side. I suppose they can cross-subsidize from their other divisions such as Kaplan, but that doesn’t seem like a stable long-term strategy to me.

The problems get worse for any newspaper that isn’t explicitly national. The local papers’ major advertising revenue sources generally include department stores, movies, and automobiles. All of those are threatened by the web. It never enters the mind of a twenty something to buy a newspaper to find movie listings, and Amazon is killing department stores all over the country. Craigslist is wiping out local newspaper classifieds, and Monster.com and it’s relatives are wiping out the Help Wanted sections. 

I think the legacy press will remain a force through the 2016 election. They still have some reserves to draw on, at least economically. But their reserves of credibility are diminished more than their circulation numbers, so the influence will be considerably diminished.  

After that, I don’t know. For all I know, news in 2020 may be delivered primarily via Facebook, with your friends “Like” preferences driving what you are offered. Or Apple might so something to leverage the iPad 7. No doubt Google will try something, and their strength with advertisers might be their hole card. None of those answer the question, though, of where the content will come from.

Getting away from traditional papers for content might require some kind of crowd-sourced solution. AP or Reuters would be obvious candidates to try that, but I don’t think either one has the web savvy or the cultural savvy to succeed.

I think the Cheezburger network has as much chance of success at crowd-sourced news as AP or Reuters. As awful as that sounds, though, I’m not sure it’s worse than depending on the New York Times.


Economic Statistics for 2 Nov 12

The following US economic statistics were announced today:

The Monster Employment Index rose 2 points in October to 156.

Factory orders rose 4.8% in September, but, like August, Aircraft orders are skewing the numbers. Ex-transportation capital goods orders actually fell -0.2%.

The BLS reports that a better-than-expected 171,000 net new jobs were created in October, and the unemployment rate rose to 7.9%. Both hourly earnings and weekly hours were unchanged. The labor force participation rate jumped 0.2 points to 63.8, as nearly 600,000 people came into the labor force, among which were a drop of 369,000 of those who are not on the labor force. The U-6 unemployment rate, the broadest measure of unemployment and under-employment, fell -0.1% to 14.6%. Overall, this is a status-quo report. There’s just enough employment growth to do keep up with the expansion of the labor force, but not enough to indicate any real improvement in the labor market, or economic growth in general.

~
Dale Franks
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Economic Statistics for 1 Nov 12

The following US economic statistics were announced today, and today is a jam-packed day for economic data:

Last night, ADP revised their September jobs figures down by half, to only 88,000 new jobs, the final release of their employment report under the old Methodology. Today, ADP begins the series all over again using Moody’s as the data analyst for the report, so we have no earthly idea how accurate or relevant this report is now, as it is essentially a brand new report with no track record. With that in mind, ADP reports that 158,000 new jobs were created in October. Tomorrow, we’ll be able to compare it with the BLS’s Employment Situation for the first time.

Motor vehicle sales came in a disappointing 14.29 million which is sharply lower than September.

Monthly chain store sales, reported slightly higher sales growth, and most retailers increased earnings guidance.

The Challenger Job-Cut Report states that 47,724 layoffs were announced in October, as lower earnings pushed companies to cut costs. It’s the highest number of layoffs since May.

Initial claims for unemployment fell 9,000 to 363,000. The 4-week moving average fell 1,500 to 367,250. Continuing claims rose 4,000 to 3.263 million.

The initial estimate for nonfarm business productivity for the 3rd quarter rose 1.9%, while unit labor costs unexpectedly fell –0.1%, mainly due to a drop in hourly compensation.

The Markit PMI Manufacturing Index fell 0.1 points to 51.0 in October.

The Bloomberg Consumer Comfort Index fell -0.1 points to -34.7, but is still among the highest readings in 4 years.

The Institute for Supply Management’s manufacturing index rose 0.2 points to 51.7, indicating continued—if very mild—economic expansion.

The Conference Board’s consumer confidence index improved in October to 72.2 from 68.4 in September.

Construction spending rose 0.6% in September, following a 0.6% drop in August, and a 0.4%  drop in July.

~
Dale Franks
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