While it has been widely reported that ad revenues, which are the lifeblood of every newspaper, have been falling for years, a new chart from the Newspaper Association of America shows just how much those revenues have fallen, portending an even bleaker future for the industry.
Since 1950, adjusted for inflation, ad revenues have gone from $20 billion to a peak of $64 billion in 2000, and back to $20 billion in 2011.
The drop in ad revenues has forced many newspapers to slash staff in order to eke out some profit, and in a few cases to completely cease operations as the economics of the business no longer made sense.
While the revenue drop hasn’t forced the largest newspapers out of business yet, it has affected their ability to gather and report the news, and the more they trim back the more subscribers they lose.
That’s the other problem. Even though subscription revenues are not the major source of income for newspapers, subscribers are important because advertising rates are set based on circulation. Circulation is mostly based on home delivery subscribers, who tend to be long-time readers, and have the disposable income that advertisers covet.
But since 1990, circulation figures for the largest daily newspapers, excluding The Wall Street Journal, have plummeted, with the steepest declines occurring in just the last three years.
In fact The Los Angeles Times, The New York Times and the New York Daily News, which all boasted circulation figures of more than 1,000,000 in 1990, are now well below that figure. The Daily News’ circulation is hovering in the 500,000 range and is still declining.
The sad fact for the newspapers is that the ad revenue has probably been lost forever, as it has moved to the Internet in a more targeted manner. Even with their effort to create websites that will attract viewers and advertisers alike, the newspapers got such a late start in that area that they are hopelessly behind the more established and nimble news sites.
There will probably always be people who would prefer to get their news from a printed newspaper. But if the ad revenue continues its downward slide their won’t be any money to print newspapers, no matter how great the demand.