We blogged recently about the health of the magazine industry, which has experienced a 10% YOY growth in readership. The news came as a surprise to many of us, given the state of newspapers today. Unfortunately, there’s no corresponding happy news in the latest stats about the health of the newspaper industry, as measured by advertising revenue.
The latest reports are that U.S. newspapers make $40 billion less from ads today than in 2000, a decline from $63.5 billion in 2000 to $23 billion in 2013. That’s significant, since newspapers generally rely on ads for nearly three-fourths of their revenue.
In this, the digital age, putting newspapers online has not helped restored their profitability. A recent essay by the Brookings Institution reports that The New York Times is one of the few that are currently making a small profit, but its advertising revenues are not reassuring. The Washington Post (which was sold earlier this year to Amazon founder Jeff Bezos for $250 million, a small fraction of its worth just a few years before) made profits of more than $120 million a year in the late 1990s but lost more than $40 million last year. “Once-strong regional newspapers from Los Angeles to Miami, from Chicago to Philadelphia, find themselves in desperate straits, their survival in doubt,” the author asserts. (The Oregonian has suffered incremental cuts over the years, reducing home deliveries last year to just four days a week for the daily newspaper).
The prognosis, according to the Brookings Institution, is poor: Although Americans spend about 5 percent of the time they devote to media of all kinds to magazines and newspapers, nearly 20 percent of advertising dollars still go to print media – a statistic that portends further declines in newspaper revenues.