Nothing like a telling graphic to illustrate what most have been expecting, albeit probably not in this order of magnitude. Veteran media exec Alan Mutter discovered some horrid statistics about the state of ad sales for American newspapers on trade organization NAA’s website, and published his view on the Q1 2009 numbers on his blog. They don’t look pretty.
The stats show that total newspaper ad sales dropped by an unprecedented 28.28% in the first quarter of 2009, a deep plunge that represents a loss of more than $2.6 billion in ad revenue compared year-over-year. Compared to 3 years ago – 2006 was a pretty good year for American newspapers – we’re looking at a drop of more than $4.5 billion in ad sales in just three years if you only take into account the first quarter.
The sharp decline is caused by the lousy state of both digital and dead tree ad sales: the stats posted on the Newspaper Association of America website show that print sales fell by 29.7% in the first three months of this year (to $5.9 billion), while online sales dropped a record 13.4% (to $696.3 million).
Classified advertising is clearly still taking major hits. Compared to the first quarter of last year, revenue from all types of classified ads fell 42,32% to less than $1.5 billion. Considering the fact that total classifieds ad sales topped $4 billion back in 2001 and were still at almost $3.4 billion in the first quarter of 2007, that has got to hurt. The biggest losers in classifieds: Recruitment (-67.39%), Real Estate (-45.55%) and Automotive (-43.42%).
Annual ad sales for American newspapers came in at a grand total of nearly $49.5 billion in 2005 and dropped to about $37.8 billion in 2008. If the decline rate keeps accelerating the way these first quarter results suggest, we could be looking at somewhere in between $26 billion and $30 billion in total ad sales revenue for this year.
And yet somehow, I fear newspapers haven’t even seen the bottom of the barrel yet.
What is the future.. Kindle ?
How can these news paper survive . ?
News *papers* will not survive. The paper will cease to exist.
Online local *community* niche oriented ezines will likely thrive.
For global news, I’m sure they’ll just syndicate AP news.
So, I expect those gloal aggregators like CNN and AP will continue but only because of their army of freelance reporters.
The problem with only having blogs and ezines around is that you’re essentially reading people’s opinions of press releases.
Real investigative journalism is important and should not die out.
I suppose that you haven’t read the New York Times lately. It is all opinion, simply because you may agree with the stated opinions doesn’t change that fact. Most of my real news frankly comes from blogs now. Talking Points Memo for politics, Andrew Sullivan for the conservative-that-can-think perspective…
The news organizations really led themselves down quite the path with journalists like Judith Miller. Trust is critical, and in my opinion it was violated. I now question not only their viability, but their need.
YMMV!
when will the same situation come to tv industry? and then to online advertising?
The problem is two-fold. On one hand, people are abandoning newspapers. Kids are no longer raised on their parents reading the paper every morning and instead get garbage beamed into their heads by the internet.
On the other hand, people have stopped reading most newspapers beause they suck. They are filled with opinion, mostly leftist views and it’s very rare that you see anything in there of any importance that you don’t already know.
The problem is not the newspapers. You have to think from the perspective of the Advertisers! Newspapers always existed before at the behest of advertisers because daily papers controlled viewership of the media.
Now, Advertisers can go directly to the customer with the internet. Internet advertising is cheaper and Businesses can make a lot more profit selling things directly online to customers, and bringing customers to their websites.
Newspapers are dead, but the delivering of News is just different. I think NYT should just stop giving away news for free and start charging for their content. Or NYT should partner with Google to get more Adsense revenue.
Delivering the news has gotten cheaper with the internet and Advertising has gotten cheaper with the internet. Its win-win for the Consumers!!! This is a good thing!!!
If Newspapers want to stay alive, they should go Non-profit or partner with CNN or some TV channel. Newspaper delivery is a dead medium.
As for advertising newspaper ads and other ads are rather different purpose. With ad spending of a company being same, online ad expenditure now takes a pie out. While tv ads are becoming more creative and entertain, and online ads yet to take off.
Actually newspapers need to change, rather, trim. And have tie-up with tv and internet, it is synergy. Best example being Times of India with tv, newspaper and popular news website.
The distribution of news used to be a very difficult proposition. Newspapers took care of distributing the news and opinionizing with advertisements by bundling all the services that could be distributed into a single stack of paper called a newspaper. Now that the internet takes care of distribution with ease, the old newspapers can’t extract their monopoly rents from the system anymore. Journalism is headed back to what it used to be 200 years ago, an amateur pastime performed by educated people who were not primarily journalists.
That this drives the NYT and other so-called “objective” media out of business is only a side benefit of the changes. In the future, if you’re a toady of the current president you can just say so without falsely claiming objectivity.
The future is WikiCity, LocalTimes, & other low-cost content pushers.
Big newspapers had farther to fall, and this chart indicates it. In many cases, smaller community papers hadn’t built themselves on classified sales and thus were leaner to begin with. Smaller community papers aren’t doing as poorly as their larger counterparts are. Our newspaper, the Salisbury Post ( http://www.salisburypost.com ) , has actually grown circulation over the last few months and our ad revenue online is up over 200% over last year.
This was inevitable. People go online to get their information now. Smart phones will only speed this process because now you can get news anywhere at anytime. Less readers means less revenue for newspapers. Why is this surprising?
Now this is the sort of Techcrunch post that I like reading, none of that nonsense from this morning about twitter engineers having the weekend off.
Nice.
Mark: very much agree. Way too much “twitter is down” “spymaster” etc., which drowns out the hard news.
Robin: thanks for the update.
Have to agree, these are the stories i like. Where the economy meets tech.
Not just economy boys! There is much more in twitter.
This is really amazing. What will they do now? Social media is eating them alive.
http://www.twibeo.com
The twitter with photos, videos and location!
k
It’s not surprising that ad sales for offline media is going down. We know that since several years, but maybe that the speed of this downturn can kill more newspapers than expected.
newspapers |= offline media
Note that online ad sales for newspapers also dropped 13.4%.
how does that compare with the overall drop in display advertising?
SEO for newspaper websites. Newspaper websites need seo like blogs – a self link, title, and links to related news articles.
And most importantly free unmoderated comments. That bbc/nyt never cared common man – now listen to him or perish.
I would like to see a TC post about user comments in Newspaper websites. Or TC doesn’t wish to give away its trade secret? ;)
Effect of Recession + Online Media + Unwillingness to adapt to newer technology + Social Networking Sites … tons of more reasons…
Craigslist is one of the major reason for classified ads to suffer. I will never pay to get my ads on newspaper (you cannot search on newspapers except when its an online version).
@James Stark -
Social media is eating some papers alive. Some (like mine) have dedicated social media people (like me) working to get our content into social spaces. We’ve found that people in Memphis still care about local news and events, they just want the information to come directly to them.
The next step is figuring out how to make it financially beneficial. There are a few thoughts – one sponsored tweet per day, sponsored blog posts, special Twitter and Facebook-only deals, selling social media services to our clients, etc. Before we can do any of that, though, we have to build our voice and brand and connect with the community. We have to make sure any advertising over social networks doesn’t alienate the people that depend on our twitter streams and facebook updates for their news.
Good luck to anyone in newspapers still fighting the good fight. After 13 years in the industry myself, most in online, I’ve decided to jump. It’s not that I don’t think there’s a future for local news. It’s just not going to happen until after the complete destruction of the newspaper industry.
$100 sponsored tweets can’t replace $3000 full page display ads (Yes, digital is cheaper than print but the numbers still don’t crunch. I’ve run them a hundred time). It gets down to you can’t replace “analog dollars for digital pennies.”
Newspapers are a collection of many revenue pieces: subscriptions, display ads (local and national), classifieds (auto, real estate, employment, merchandise), special sections, and all the other gimmicks wrapped up in a beautiful business model. The advertisers bought out of desperation to reach a local audience. The web ended the desperation.
The real death knell is technology is helping big act small. Think about Facebook; it’s what newspapers have been dreaming about being able to do for over a decade. Take any topic or category and you’ll find a global site that can provide an increasingly local experience for users and advertisers.
Newspapers cover many categories, just enough, to fill the ever decreasing number of pages (travel, business, lifestyle, health, autos, real estate, etc.). That doesn’t work online. Users demand more. So newspapers end up with local news. So what’s the answer? Just cut each newspaper’s staff by 80 percent, shut down the printing presses, and welcome to the new age of local news.
Of course that’ll never happen. Too many publishers, VP’s, directors, managers, and other big wigs trying to figure out how to keep this balloon afloat long enough to retire. Reality will set in when the economy returns but the newspaper dollars don’t. It will be spectacular. Again, good luck.
Nice. Someone should do post in plummeting ad sales for media and gaming sites as well.
@Tony
Our gaming website – one of the biggest – is performing above expectation. No worries about recession there. Games have a long shelf life, people still buying them.
*yawn* Are we going to keep bemoaning the death of VHS too? What about 8-track? Newspapers are dead. People don’t want them. News is not dead, people want it. Figure it out.
One very important factor that was not talked about is the pricing, or more precisely, mis-pricing fiasco that lead to decreased sales.
they’d better get an online strategic footprint ASAP.
Maybe they can use your excellent strategy. That is to annoy the hell out of people.
By the way, watched your bullshit video, which pitched your bullshit business. Do you actually think anyone cares about it? I noted that it said you were profitable, too. C’mon, even you don’t believe your own hot air. Your idea is crap. Your comments are crap. You will revolutionize nothing.
great news, may it continue … part of a toxic system
The current number of newspapers were defined by the need to provide news in a small geographical region. Printing and delivering a paper at 6am was a key competitive advantage. One event needed to be rewritten, printed and distributed by 1000s of newspapers all over the world.
Now news can reach the world in seconds in a single twit from a cellphone in Malasia.
The value of NYTimes or WSJ today is not given by the fact that they distribute news events (almost a commodity), but by the quality of their writers.
Is that sustainable ? what is a “newspaper” ? should it be a collection of smart bloggers sharing a sales team ?
Maybe this Newspapers will look in the future like Record Labels trying to keep their best artists in house.
Robin: well done thanks.
I bet that we’ll see something come out of the ‘Secret Meeting’ last week in Chicago.
The forces are massing for some changes in the way that news ‘papers’ sell ads and make money.
This chart is not pretty. It can’t continue on like this for too much longer without radical change.
The pendulum will swing back, from the totally free access we all enjoy today to a micropayment or gated content model. It will happen soon. Remember you heard it here, ummm, fourth or fifth.
Was waiting for someone to come and drag micro-payments and other nonsense into the debate.
http://www.techcrunch.com/2009/05/18/there-we-go-again-no-micropayments-wont-save-journalism/
Nonsense? You mean like giving away stuff for free? Ad CPMs are cratering in the real world. Large media corporations don’t care that you think that you should get ‘news’ for free. They listened to idiots who (still) tell them that they will make up for losses with volume.
You don’t see cable companies giving away anything for free. They have multiple revenue streams and the day you cancel they show up and cut your line.
This isn’t 1996 anymore. The ‘digital’ division of newspapers isn’t a hobby anymore. It needs to make money, or else.
Get a clue. Did you not look at the same charts in your own article? That does not spell ‘free forever’ to me. And TechCrunch, as much as we all love it, is an abberation. Blogs burn through writers who can’t live on $50k a year forever while repurposing content from large media companies that they turn around and savage as dinosaurs.
The pendulum is swinging, and it will swing in the direction on audience monetization next. Come visit the real world soon, but bring sunglasses since you appear to have been wearing blinders for a little too long.
Here’s the thing: I’m an avid F1 fan. There are hundreds of f1 websites out there but there’s only one that provides me with details and insights that I can’t get anywhere else. I’m happy to pay 40 dollars a year for that content. It’s unique, I simply can’t get it anywhere else.
The news these newspaper sites offer isn’t unique. I can get the same information from hundreds of different sites. And as long as that will be the case, and I’m certain it will remain that way, there’s no way any newspaper is going to succeed in charging for it.
Oh, by the way, that site I was talking about: still offers free news. That’s how they lure people to them, but even that’s offered with a twist.
Micropayments won’t work as long as the opening line on any news article on the web reads: “AP – “. And let’s be honest there, fat chance of that changing any time soon.
‘News’ isn’t worth anything. Journalism and Original content is. No one is talking about charging for ‘news’. The junk I am writing this second isn’t even news. Most Blogs aren’t worth even ‘free’.
‘Oprah is on Twitter’ is news. Jon and Kate is news. Plane Crash is news.
An in-depth, pulitzer-prize-winning expose or long form story that can only be found in one place – like your F1 content – that is what will be charged for. And you will gladly pay for it because it won’t be ubiquitous, it will be something that you will get value from.
I am absolutely not advocating that ‘newspapers’ start putting meters on their websites. In fact, that is the simplistic straw man that people erect just so they can disprove that payment for content is a valid concept. That doesn’t make sense.
You can read the front page of the WSJ for free all you want, online or at the newstand. As soon as you want to dive in, start paying.
Same thing for cable pay per view movies.
Same thing for a wine tasting at a winery.
Same thing for a test drive at a car dealer
Once newspapers get out of the business of repurposing AP stories and focus on charging for original content – and give away the othe stuff for free, then they are on the way to making money online and offline. The news will be a teaser, as it used to be.
I am astounded that this concept is so hard to grasp by so many smart people who want to monetize their site with display ads. Oh, okay now I understand….they think that display ads make real money for publishers….at $.25 cpms.
talk to CFOs. they are changing as soon as they can move to subscription models, gated content, anything that makes up the difference between costs and revenues. It is the main topic at any publishing conference. It’s just a matter of who goes first…
@Hendriks. Nonsense. People wont pay them tax.
Its been well documented that new media is starting to replace newspapers with respect to generating ad revenue. I fully expect the trend to continue.
It is expected because of heavy compitition now a days from free classified websites like http://www.hindlist.com http://www.craigslist.com
which are offering its users to post free ads and these sites are also generating huge traffic which is beneficial to users. I think the era of news paper ads will end soon. Eventhough some newpapers ads may survive for more period.
Yes, why should I pay a newspaper $20 or more for 3 lines of static print text when I can have full paragraphs, bullet lists, and full color pictures on Craigslist for free in most locations, and all without consulting a sales rep on the phone?
Many people are putting up local/regional classified sites as the software to do this is getting so much better.
See my latest sites for an example
http://ncwlist.com – new
http://racingclassifieds.net – 2000 ads
http://vintage-cars.old-n-good.com/ – 9000 ads
This site is simple, very easy to browse ads and fast even with over 9k ads. I put up one or more of these types of site a month for different areas and different subjects – antiques – old cars – local classifieds etc
Something’s gotta be seeing an upsurge. If close to 50 billion dollars over a short time *wasn’t* spent on newspaper ads, some (much?) of it was likely spent on something else. Online ads, surely, but what else?
The days of newspaper advertisements are long over. The future is online. Hate it or love it.
gotta love graphs that only portray a certain range of values.
any drop can look like a death dealing precipice if you play that game
In many European cities there are free papers such as Metro which are distributed on mass transit (trains) and are funded solely by ads. The news in them is lightweight reprints of other newspaper stories. Do these exist in the US? I wonder how much these eat into other newspapers ads. Anyone know?
They exist and Quebec media giant Quebecor has explored that medium (“free”) papers in the transit system for a few years now.
It’s still a broken business model. Paper news is simply too old… unless a realtime RSS toilet paper printer (with consumer cost equivalent to that of toilet paper in it’s current static form) becomes a reality.
It won’t.
I was initially taken aback when Marc Andreessen stated to Charlie Rose that the NYT (and all other newspapers) should cease print operations ; immediately.
That was on February 19, 2009 – it’s time to stop the presses.
Yes they exist in many large US cities.
Not suprised.
Or surprised.
I’ve got one thing to say: ask RJ Garbowicz !!
The newspapers have to go mobile. Many already do, some are still hanging on the idea. Did you know most Hispanic newspapers still have no technology innovation. Mobile!!! is the future cheapos.
What surprises me is that there are any “dead tree” newspapers left to advertise in at all, and not the drop in advertising. Those things have only been good for lining the bottoms of birdcages for decades now, I wouldn’t read one if you gave it to me. I get irritated at the thought of so many forests gone to the blade for all that trash (literally). Online baby!
Please! Forests don’t just disappear when trees are cut for paper. These are managed, renewable tree farms that are continually replanted and replenished. When will the Loraxes of the world stop promoting the false notion that paper is produced at the expense of the trees by the evil capitalist Onceler?
What’s killing the media is advertising. Instead of seeing themselves as in the business of providing new information and analysis, the media see themselves as deliverers of just enough content to get the rubes to look at the ads. Advertising has gone pathological and most of it needs to die. A few per cent of it is useful information about new products, services and events and 99% is merely a frantic scrabbling for progressively diminishing returns. And the Web is fast going the same route. That’s why nearly half of the width of this page is blank down here.
why pay for a local newspaper classified, if I can post the same ad for free in Craiglist and reach a broader audience?
Newspapers needs to change their ad business model or distribute online ads for free to compete with Craiglist or partner with Craiglist to distribute their listings… just an idea
Maybe we are all just kind of sick to death of Bad News, the job is hard enough anyway.
Got a great idea for someone a GoodNewsPaper, that may do a little better. lol Mark