Did You Read this in The Paper Today?: Biggest Drop Ever for Newspaper Revenue in 2007

by on March 31, 2008 · 20 comments

The Newspaper Association of America reported on Friday that print ad revenue for the industry fell by 9.4 percent last year, the biggest decline since it started keeping records in 1950. Within this total, classified ad revenue was hit even harder, down by some 17 percent. The figures show an accelerating decline in newspapers fortunes.

The figures were widely reported newspapers across the country, from the Wall Street Journal to the New York Times to the Chicago Tribune. And I didn’t read it in any of them. Like an increasing number of Americans I read the stories only in electronic form, learning about the development initially through an e-mail.


Of course, the misfortunes of print news are to some extent balanced by growth in their online alter egos. But not completely: even when ad revenue from online operations is added in, newspaper revenue is down significantly (7.9 percent). While online publication may represent the future for many newspapers, it’s a more challenging and competitive future. The era of the dominant newspaper – if we can even define what a “newspaper” is – may be over.

Despite this, however, the era of newspaper regulation may not be over. This week, the Senate Commerce Committee is expected to vote on a “resolution of disapproval” overturning the FCC’s recent move to relax the ban on newspaper-broadcaster cross-ownership. The argument is that these two troubled media forms would monopolize news and information. It’s nonsense, of course, as detailed by my colleague Adam Thierer. But it may pass anyway.

Be sure to check online to see what happens.

  • http://enigmafoundry.wordpress.com/2008/03/05/rumours-of-the-death-of-the-newspaper-have-been-greatly-exaggerated/ enigma_foundry

    Well though another process which is occurring is that newspapers are emerging as not for profits. There’s no reason why we can’t have great newspapers, run as not-for-profits.

    What’s more important–a vibrant and free press, whose goals would be the public good, or one that is owned by corporate interests, for profit.

    The benefits of a free press extend very far beyond the profitability of the newspapers as business entities.

    Adam, of course, was unable to come up with any reply to this, perhaps you’d have something to say, James…

    The Rumours of the Death of the Newspaper have been greatly exaggerated

  • http://enigmafoundry.wordpress.com eee_eff

    Well though another process which is occurring is that newspapers are emerging as not for profits. There’s no reason why we can’t have great newspapers, run as not-for-profits.

    What’s more important–a vibrant and free press, whose goals would be the public good, or one that is owned by corporate interests, for profit.

    The benefits of a free press extend very far beyond the profitability of the newspapers as business entities.

    Adam, of course, was unable to come up with any reply to this, perhaps you’d have something to say, James…

    The Rumours of the Death of the Newspaper have been greatly exaggerated

  • http://cei.org/people/ryan-radia Ryan Radia

    Enigms, I think you misinterpret Adam’s argument. The decline of newspapers isn’t necessarily a good thing, but it is reality. The market is changing, and consumers are less interested in spending money on print media. FCC ownership rules will only make things harder for newspapers to compete with online media.

    While many papers will be forced to close, others may well remain profitable, and I wish them all the best. As a WSJ subscriber, I dread the day that paper goes bust. But if it does, so be it. Rest assured that, thanks to natural market processs, online journalists will be waiting in throws should traditional media continue on its present path.

    Changing ownership rules might not make newspapers more profitable, but, as Kevin Martin himself argues, it probably will. Economies of scale make it easier for large media companies to cover news cost-effectively. But regardless of newspaper profits, media coverage of public affairs will remain just as useful.

  • http://cei.org/people/ryan-radia Ryan Radia

    Enigms, I think you misinterpret Adam’s argument. The decline of newspapers isn’t necessarily a good thing, but it is reality. The market is changing, and consumers are less interested in spending money on print media. FCC ownership rules will only make things harder for newspapers to compete with online media.

    While many papers will be forced to close, others may well remain profitable, and I wish them all the best. As a WSJ subscriber, I dread the day that paper goes bust. But if it does, so be it. Rest assured that, thanks to natural market processs, online journalists will be waiting in throws should traditional media continue on its present path.

    Changing ownership rules might not make newspapers more profitable, but, as Kevin Martin himself argues, it probably will. Economies of scale make it easier for large media companies to cover news cost-effectively. But regardless of newspaper profits, media coverage of public affairs will remain just as useful.

  • Timon

    James,

    You may find some support for your line of reasoning in the amazing case of the Lawrence Journal-World, which I gather is a combination of Newpaper-ISP-Cable TV operator and possibly broadcaster, as well as open source software publisher and all-around good guys. There is an interesting discussion on ITConversations between Jon Udell and Adrian Holovaty within the last month or so on the topic.

  • Timon

    James,

    You may find some support for your line of reasoning in the amazing case of the Lawrence Journal-World, which I gather is a combination of Newpaper-ISP-Cable TV operator and possibly broadcaster, as well as open source software publisher and all-around good guys. There is an interesting discussion on ITConversations between Jon Udell and Adrian Holovaty within the last month or so on the topic.

  • Adam Thierer

    Mr. Foundry’s definition of a “free press” is really nothing of the sort. It is freedom brought to you in the form of chains. He simply refuses to allow markets to order themselves naturally and instead prefers that bureaucrats order them for us.

    Meanwhile, as Ryan rightly notes above, the unchained world of online media marches forward, eating up everything in its path. Again, as I have stated countless times before, I have absolutely no problem with that. That is the marketplace I want for ALL media operators; one without the tyranny of Big Government holding back any one marketplace participant.

    Will newspapers fail in that unconstrained market? Perhaps, or perhaps they will just evolve into some other sort of entity (and mostly do so online, of course). Problem is, we will never know so long as those archaic chains of analog era regulation remains draped around their collective necks. To be in favor of the retention of those chains is to say you don’t mind seeing one participant in a race hobbled with asymmetrical burdens that others in the race do not face. That strikes me as radically unfair.

    Compounding that unfairness is the suggestion that, “There’s no reason why we can’t have great newspapers, run as not-for-profits.” Oh, I see. So long as newspaper commits to having a business model along the lines of NPR, PBS or the BBC, everything will be just fine. Well, maybe not. Those business models depend on philanthropy and government subsidy. Surely that is not the model that is best for ALL media. Only a rabid neo-Marxist would suggest such a thing. (And why should taxpayers foot the bill?)

    SOME non-profit models might work, but for-profit models should be given the chance to work also. If we tie markets in knots with completely arbitrary operational rules and restrictions, we will never know what truly works best. I favor the freedom to experiment and find out. Others, like Mr. Foundry, favor the centralized directives of unelected bureaucrats to divine for us what media markets should look like. It’s the difference between true freedom and faux freedom.

  • http://www.techliberation.com Adam Thierer

    Mr. Foundry’s definition of a “free press” is really nothing of the sort. It is freedom brought to you in the form of chains. He simply refuses to allow markets to order themselves naturally and instead prefers that bureaucrats order them for us.

    Meanwhile, as Ryan rightly notes above, the unchained world of online media marches forward, eating up everything in its path. Again, as I have stated countless times before, I have absolutely no problem with that. That is the marketplace I want for ALL media operators; one without the tyranny of Big Government holding back any one marketplace participant.

    Will newspapers fail in that unconstrained market? Perhaps, or perhaps they will just evolve into some other sort of entity (and mostly do so online, of course). Problem is, we will never know so long as those archaic chains of analog era regulation remains draped around their collective necks. To be in favor of the retention of those chains is to say you don’t mind seeing one participant in a race hobbled with asymmetrical burdens that others in the race do not face. That strikes me as radically unfair.

    Compounding that unfairness is the suggestion that, “There’s no reason why we can’t have great newspapers, run as not-for-profits.” Oh, I see. So long as newspaper commits to having a business model along the lines of NPR, PBS or the BBC, everything will be just fine. Well, maybe not. Those business models depend on philanthropy and government subsidy. Surely that is not the model that is best for ALL media. Only a rabid neo-Marxist would suggest such a thing. (And why should taxpayers foot the bill?)

    SOME non-profit models might work, but for-profit models should be given the chance to work also. If we tie markets in knots with completely arbitrary operational rules and restrictions, we will never know what truly works best. I favor the freedom to experiment and find out. Others, like Mr. Foundry, favor the centralized directives of unelected bureaucrats to divine for us what media markets should look like. It’s the difference between true freedom and faux freedom.

  • Enigma Foundry

    Enigma Foundry writes: “There’s no reason why we can’t have great newspapers, run as not-for-profits”.

    Mr. Foundry — Don’t look to me for criticism of non-profits. I work for one (The Heritage Foundation). I think they are wonderful.

    I also welcome anyone providing news on a non-profit basis. Good for them, the more the merrier. That’s not a new thing at all, though. We’ve had newspapers and magazines for years that are not oriented toward profits. Many — perhaps most policy-oriented magazines, and even some newspapers (think Washington Times) consistently take losses. If their owners are in it for the bucks, they have surely been disappointed.

    But I wouldn’t expect (or want) non-profits to be the predominant source of news. Most of those that provide news without profit naturally enough have a cause of their own. Their reward is furthering that cause, rather than making money. Again, good for them. But if I’m looking for hard news without an axe being ground, I’d want to hear someone who’s just in it for money.

    At any rate, none of this affects my overall conclusion. The current ownership rules make it harder for all newspapers to do their job — whether they are for-profit or not-for-profit. Cross-ownerhip limits don’t make sense in a converging world, whether you plan to end the year with extra money in your pocket or not. Perhaps especially if the answer is “not.”

  • James Gattuso

    The last comment was actually from me, not Enigma.

  • Enigma Foundry

    Enigma Foundry writes: “There’s no reason why we can’t have great newspapers, run as not-for-profits”.

    Mr. Foundry — Don’t look to me for criticism of non-profits. I work for one (The Heritage Foundation). I think they are wonderful.

    I also welcome anyone providing news on a non-profit basis. Good for them, the more the merrier. That’s not a new thing at all, though. We’ve had newspapers and magazines for years that are not oriented toward profits. Many — perhaps most policy-oriented magazines, and even some newspapers (think Washington Times) consistently take losses. If their owners are in it for the bucks, they have surely been disappointed.

    But I wouldn’t expect (or want) non-profits to be the predominant source of news. Most of those that provide news without profit naturally enough have a cause of their own. Their reward is furthering that cause, rather than making money. Again, good for them. But if I’m looking for hard news without an axe being ground, I’d want to hear someone who’s just in it for money.

    At any rate, none of this affects my overall conclusion. The current ownership rules make it harder for all newspapers to do their job — whether they are for-profit or not-for-profit. Cross-ownerhip limits don’t make sense in a converging world, whether you plan to end the year with extra money in your pocket or not. Perhaps especially if the answer is “not.”

  • James Gattuso

    The last comment was actually from me, not Enigma.

  • Mark

    Newspapers need to start charging the Cable news and internet outlets for carrying their stories. Although there are thousands and thousands of news outlets accross many media now days, the primary task of news reporting and content generation is done by paper press still. And less and less each year.

  • Mark

    Newspapers need to start charging the Cable news and internet outlets for carrying their stories. Although there are thousands and thousands of news outlets accross many media now days, the primary task of news reporting and content generation is done by paper press still. And less and less each year.

  • http://enigmafoundry.wordpress.com/2008/03/05/rumours-of-the-death-of-the-newspaper-have-been-greatly-exaggerated/ enigma_foundry

    At any rate, none of this affects my overall conclusion. The current ownership rules make it harder for all newspapers to do their job — whether they are for-profit or not-for-profit. Cross-ownerhip limits don’t make sense in a converging world, whether you plan to end the year with extra money in your pocket or not. Perhaps especially if the answer is “not.”

    James: If you narrowly focus on newspaper’s jobs as: the ability to bring profits for their owners, then yes, certainly.

    However, I would say that there are other non-economic factors that are at the forefront of why people become journalists, and why they want to work for a newspaper. Those non-economic factors mean that an analysis of what newspaper’s function is needs to take into account their role in uncovering corruption, looking out for those less fortunate, playing a role in a larger public debate about policy issues.

    At a certain point, of course, it becomes irrelevant-if newspapers are so terribly un-profitable they will go out of business–unless–there is a new business model that could support a newspaper. I believe that not-for-profit organization-furnishing certain tax and other economic advantages-would provide that model.

    The question then becomes: does a not-for-profit organization provide such a model. There are several peices of evidence that show that it can. Here’s an article from the Christian Science Monitor:

    From the Christian Science Monitor:

    NONPROFIT JOURNALISM ON THE RISE
    At a time of layoffs and budget cuts at traditional newspapers, foundations and donors are funding new journalism ventures.

    SAN DIEGO – The police chief’s rosy crime statistics were a lie, it turned out. The councilman who urged water conservation was discovered to use 80,000 gallons a month at his home, more than five of his colleagues put together. And the school board president, according to an investigation, spent a full third of his time out of town and out of touch.
    The Voice of San Diego, a nonprofit online media outlet, doesn’t have enough journalists to field a softball team. Yet it has managed to take on the powerful with the panache of a scrappy big-city paper.
    It provides “the best coverage of city politics that we’ve had in years,” raves Dean Nelson, a journalism professor at San Diego’s Point Loma Nazarene University.
    The success of the tightly focused Voice, which relies on donors, offers a ray of hope for a troubled industry. Plagued by shrinking circulations and advertising, newspapers are shedding staff and downsizing their offerings. Even the pages have gotten smaller.
    By contrast, several nonprofit newspapers – though rare and often tiny – have sprung up in recent years both online and in print, funded largely by foundations and individual donors.

  • http://enigmafoundry.wordpress.com eee_eff

    At any rate, none of this affects my overall conclusion. The current ownership rules make it harder for all newspapers to do their job — whether they are for-profit or not-for-profit. Cross-ownerhip limits don’t make sense in a converging world, whether you plan to end the year with extra money in your pocket or not. Perhaps especially if the answer is “not.”

    James: If you narrowly focus on newspaper’s jobs as: the ability to bring profits for their owners, then yes, certainly.

    However, I would say that there are other non-economic factors that are at the forefront of why people become journalists, and why they want to work for a newspaper. Those non-economic factors mean that an analysis of what newspaper’s function is needs to take into account their role in uncovering corruption, looking out for those less fortunate, playing a role in a larger public debate about policy issues.

    At a certain point, of course, it becomes irrelevant-if newspapers are so terribly un-profitable they will go out of business–unless–there is a new business model that could support a newspaper. I believe that not-for-profit organization-furnishing certain tax and other economic advantages-would provide that model.

    The question then becomes: does a not-for-profit organization provide such a model. There are several peices of evidence that show that it can. Here’s an article from the Christian Science Monitor:

    From the Christian Science Monitor:

    NONPROFIT JOURNALISM ON THE RISE
    At a time of layoffs and budget cuts at traditional newspapers, foundations and donors are funding new journalism ventures.

    SAN DIEGO – The police chief’s rosy crime statistics were a lie, it turned out. The councilman who urged water conservation was discovered to use 80,000 gallons a month at his home, more than five of his colleagues put together. And the school board president, according to an investigation, spent a full third of his time out of town and out of touch.
    The Voice of San Diego, a nonprofit online media outlet, doesn’t have enough journalists to field a softball team. Yet it has managed to take on the powerful with the panache of a scrappy big-city paper.
    It provides “the best coverage of city politics that we’ve had in years,” raves Dean Nelson, a journalism professor at San Diego’s Point Loma Nazarene University.
    The success of the tightly focused Voice, which relies on donors, offers a ray of hope for a troubled industry. Plagued by shrinking circulations and advertising, newspapers are shedding staff and downsizing their offerings. Even the pages have gotten smaller.
    By contrast, several nonprofit newspapers – though rare and often tiny – have sprung up in recent years both online and in print, funded largely by foundations and individual donors.

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