Very bad news for newspapers
Cory Bergman June 14th, 2008
Print advertising sales dropped a record 14 percent in the first quarter, reports the Newspaper Association of America. Real estate and recruitment ads fell 35 percent. Meanwhile, newspapers’ online revenue grew 7 percent over last year: the smallest gain since the industry group began reporting online sales growth in 2004. So how bad is this? The NAA is thinking about “moving away” from releasing quarterly stats, reports ClickZ.
4 Comments Add your own
1. Bill G | June 15th, 2008 at 7:59 am
Online profits will never replace print profits for newspapers. Print profits were possible because of near monopoly control over distribution. Who else delivered such a big advertising vehicle to every household in a market?
Online newspapers compete on the same playing field as all other online sites. No monopoly distribution means no monopoly level profits.
2. I Like Local! | June 15th, 2008 at 9:08 am
Broadcast TV and cable TV also have a similar “semi-monopoly” on local distribution that’s being turned upside down by the Internet and other competitive changes. Newspapers are simply the first to feel it.
When a newspaper sells 14% less advertising, profits don’t necessarily drop 14% because they save one of their largest costs - paper & ink. (Eventually that affects people costs, of course). But when a station sells 14% less, doesn’t that loss drop straight to the bottom line?
I think most readers of this blog know that all media is being turned upside down by Internet innovation, and that all forms of local media have a common future online and a common competition against national players delivering targeted local advertising.
3. Lannie Byrd | June 15th, 2008 at 6:04 pm
A large part of most newspapers online revenue is tied to classified revenue and now that classified revenue is rapidly declining that portion of online revenue is also revenue declining. If you could find a study looking at pure online only revenue I bet the revenue growth would be much higher.
4. wtf? | June 16th, 2008 at 8:00 am
There is no innovation at newspapers.
It’s just re-purposing classified ads.
It’s trying to do tv newscasts on their sites, which no one watches.
It’s extending a new branch of content coverage to a niche area.
The new niches, like Mom’s groups, they’re too late on. Most mom’s groups have already organized on one of 100s of options that are out there.
The only way they can really grow is to innovate and develop new services. But that’s a mindset that they (and TV sites) can’t embrace.
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