Future Of The Us Newspaper Industry

Essay by hoopgodUniversity, Master'sA-, March 2010

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The newspaper industry has experienced more than a 10% decline in circulation since 1998. Average weekday newspaper circulation for the six months ended Sept. 30, 2009 dropped nearly 11%, the starkest decline in years and a sign of both the industry's deepening troubles. The average weekday circulation of the nearly 400 daily papers that reported sales slid 10.6% to 30.4 million[1].

Advertising revenue is fairing just as poorly. In 2008, total advertising revenues (both print and online) declined 16.6 percent to $37.85 billion, according to the latest figures from the Newspaper Association of America�� HYPERLINK "http://docs.google.com/Doc?docid=0AVwjD4VcGAHcZGZmMmN6ODdfNThnbXdxNTlnbg&hl=en" \l "_ftn2" [2]. That is $7.5 billion less than in 2007. Print advertising declined 17.7%; classifieds were down 29.7% and even online advertising was down 1.8% to $3.1 billion. While this decrease was greater than previous years, ad revenues have been consistently declining over the last 15 years. This severe contraction in revenues is a result of the economic recession and competition from the Web.

Having only two revenue streams, subscriptions and advertising, has hampered the newspaper industry's growth, especially during recessionary periods. As the migration to the Internet for news and information continues to increase, especially among young readers, the current business model of the Boston Globe is not sustainable. Ad rates for online exposure are a fraction of what they once were in print. Online readership is seeing a double digit growth annually; however, the revenue from online exposure accounts for less than 8% of newspapers' total revenue. Subscription-based fees, or micro-payments, have generally proved unsuccessful throughout the industry. Consumers see news outlets that have been successful in initiating a subscription-based online model, such as WSJ, as providing relevant and practical information. Without this perception, it will be difficult to charge users for content without alienating them.

The top 10 online newspapers...