The End of a Business..

In 2009, newspapers made $27.564 billion in total advertising revenue. As a whole, they generated $24.821 in print revenue, while the rest ($2.743 billion) came from online advertising.

Those numbers are indeed big, but when you put them in context, they are simply bad. In 2008, newspapers made $37.848 billion. Yes, they made a full $10 billion more last year than they did this year, a staggering drop of 27.2%. Nearly all of that loss was from print: Newspapers made $34.74 billion in print advertising in 2008, while they only accumulated $24.821 billion in 2009.

The story’s even worse when you go farther back into newspaper advertising history. Let me outline just how far newspapers have fallen:

• In 2000, newspapers peaked at $48.67 billion in revenue. This came entirely from print — the NAA did not track online ad revenue at that time, but we can assume it was a minuscule number.
• In 2001, it started dropping. Revenues dropped from $48.67 billion to $44.305 billion, a 9% decrease year-over-year. This was during the time of the Dot Com Bust and the related recession, so this is no big surprise.
• During 2002-2006, print advertising revenues hovered between $44 and $47 billion.
• Around this time, the NAA also began tracking online ad revenue. At the peak in 2005, combined ad revenue reached $49.435 billion, with $2.027 billion of it coming from online sales
• Then the floor completely caved in. In 2006, newspapers made $49.275 billion in total revenue. In 2007, it was $45.375 billion. In 2008, it dropped to $37.848 billion. In 2009, it plummeted all the way to $27.564 billion. In four years, newspaper ad revenue dropped by 44.24%. That’s nearly half of the industry’s revenue
• In 2011, national newspaper advertising revenue was down 10.5%, classified down 11% and retail 8%

Below is a spreadsheet outlining the details

Charlie Rose Interview

Charlie Rose Interview

Walter Isaacson of New York Times, Robert Thomson of Wall Street Journal and Mort Zuckerman of The New York Daily News discuss the future of newspapers. 

A Look at NYT Financials

The U.S. newspaper industry is suffering on of the worst financial crisis the industry has seen since the Great Depression. Advertising revenues have plummeted because readership habits have changed.  Consumers now turn to the Internet for free news and information.  Readers have ditched the black and white print for a digital version causing circulation and advertising revenue to plummet.  Back in February, New York Time experienced a 12.2 percent decline in profit which does not offset the advertising losses.

In response to the news being read online, the company rolled out an online pay system last year for these digital subscribers.  This new system led to a 20% rise of subscribers from the third quarter to about 390,000 and helped circulation revenue grow 5% to $241.6 million in the fourth quarter.  Net income was $58.9 million compared to 67.1 in previous year.  However, in the year of 2011, the company reported a net loss of $39.7 million, translating to 27 cents per share as opposed to the 71 cent per share the company was seeing in 2010.

Although the company started 2012 without a CEO,  publisher Arthur Sulzberger Jr. has step forward to take on the job until a replacement is found. The company is searching for someone who as all the appropriate credentials as well as experience in digital and brand building to help guide the way with this new long-term growth strategy. Sulzberger is confident that the online subscriptions represent a new stream of revenue that can sustain profits while the company continues to improve to fit the needs of the consumer and the trends of the industry.

The Future of Newspaper

Newspapers are dead in America. With bloggers replacing journalists, free online content replacing paid subscriptions, and Craigslist replacing ad sales, newspapers are done.

However, in developing markets in Africa and Asia, newspapers are experiencing remarkable, consistent growth. 

A number of factors are contributing: Overall per-capita income is increasing— but not to the point for the average citizen to be able to afford a computer. Literacy rates are rising. Urban populations are growing, and technological and geopolitical changes are making more people interested in world events.  India alone has 8000 different publications.

 

Of course, opening a newspaper in a foreign country is a bit more complicated than selling a product, but still, following the Rupert Murdoch business model, American newspapers could possibly see revenue growth in oversees channels.

-Zack Poche

Future of the Newspaper Industry

Due to the advancement of the internet and other technology, newspapers and magazines have uncertain futures.  Personally, I do not subscribe to newspapers or pay for online subscriptions because there is so much content available for free online.  However, newspapers are trying to find a way to keep their subscribers paying for online content.  These graphs represent differences in total page views and site visits before and after the “pay wall.”

 

Currently, the job market in the Newspaper industry is bleak.  According to a study conducted by Linkedin, Newspapers are the “fastest shrinking industry in the U.S.”  Advertising revenue for newspapers has completely dropped because of the changing landscape of the industry.

-Lauren

http://articles.businessinsider.com/2012-03-08/tech/31135175_1_linkedin-job-growth-newspapers

http://vator.tv/news/2011-04-12-nytimescom-traffic-takes-a-hit-post-paywall