Some Perspective on the Newspaper Industry

Today’s edition of USA Today has a great article summarizing the opportunities and challenges facing the newspaper industry. Some of the important highlights and data points:

  • “At least one city — possibly San Francisco, Miami, Minneapolis or Cleveland — likely will soon lose its last daily newspaper, analysts say.”
  • “About 80% of newspaper revenue comes from advertising, and the Newspaper Association of America expects those sales to drop 9.7% in 2009 to $34.2 billion, after falling 16.5% in 2008.”
  • In addition to the closing of the Denver Rocky Mountain News and the transformation of the Seattle PI into an online-only venture, “The Detroit Free Press and The Detroit News announced plans to cut home delivery to three days a week beginning March 30 and urged readers to go online to follow the news on other days.”
  • “Virtually every major newspaper announced staff cuts.” and “Those keeping their jobs have seen salaries cut.”
  • “Most large publishers also are straining to pay off heavy debt they took on before the economy fell into a tailspin.”

But not everything is doom and gloom:

  • “Nearly half of all adults read a newspaper every day and spent $10.5 billion last year to do so.”
  • “The average newspaper generates about a 10% profit margin.”
  • Newspapers in large urban areas are suffering more than the ones in smaller cities
  • Newspaper organizations are experimenting. Those “include The New York Times‘ plan to enlist journalism students to help cover some neighborhoods in Brooklyn and New Jersey. The East Valley Tribune in Mesa, Ariz., recently began to offer free home delivery four days a week to neighborhoods with families that appeal to advertisers.”

Some additional data

  • Newspapers ” typically charge about $25 for every 1,000 people who might see an ad covering one-third of a page.”
  • “About 85% of a newspaper’s costs go to things such as presses, paper, ink and trucks.”

What it means: it’s the first article I’ve seen in the last few months that’s really balanced and talks clearly about the issues facing the industry, some of the opportunities available and thoughts on the future. A must-read for anyone wanting to catch up to the industry.

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