There is no sugarcoating it. The outlook for newspaper publishers in the US is dismal.
eMarketer estimates that newspaper advertising revenues declined 16.4% in 2008 to $37.9 billion.
By 2012, spending will slide to $28.4 billion.
“The current economic situation is making things tough across all media, but newspaper revenues are falling more than in any other major medium,” says Carol Krol, eMarketer senior analyst and author of the new report, Newspapers in Crisis: Migrating Online. “Even the former bulwark of newspaper revenues, classified advertising, is plummeting due to craigslist and other online alternatives.”
The financial pressure on newspapers is enormous.
“To attract both readers and advertisers, newspaper publishers are beefing up their Websites,” says Ms. Krol. “But even online ad revenues—which offered a glimmer of hope—are now falling.”
The Newspaper Association of America tracked two consecutive quarters of declining revenues for newspapers online for Q2 and Q3 of 2008, the first time that has occurred since it began tracking online figures in 2003.
For 2008, eMarketer estimates online newspaper ad revenues declined by 0.4% overall compared with 2007, to $3.2 billion, and forecasts they will drop further into negative territory in 2009, down 4.7% to $3 billion.
“The challenge for newspapers is continuing to make money while they transition to online,” says Ms. Krol. “But they face the same transition problems that plague other traditional media, such as TV, and so far they have not been able to crack the code.”
The “State of the News Media 2008” report, published by Pew Research Center's Project for Excellence in Journalism, described the dilemma as a decoupling of news and advertising: “More and more it appears the biggest problem facing traditional media has less to do with where people get information than how to pay for it—the emerging reality is that advertising isn’t migrating online with the consumer.”
“It’s like changing the oil in your car while you’re driving down the freeway,”
Howard Weaver of McClatchy told Pew researchers.
“New business models beyond advertising may be required,” says Ms. Krol.