The U.S. newspaper industry was already facing numerous challenges before the economy took a nosedive, but the latest data from the Newspaper Association of America shows that the current economic climate has only exacerbated the already dire state of the American newspaper industry. Specifically, total newspaper advertising revenue fell 16.6% in 2008. Classifieds advertising, which is under a lot of pressure from online ventures like Craigslist, fell almost 30%, and real estate classifieds fell 38%.
Thanks to the U.S. housing boom, real estate classifieds had been one of the most stable sources of advertising income for newspapers, with growth rates up to 30% in 2006. But now, even recruitment advertising, another income source newspapers used to be able to count on, fell a full 42% in 2008 (and more than 50% in the last quarter of 2008), as overall recruitment fell to record lows thanks to the state of the economy, and as both recruiters and job seekers moved online to advertise and search for jobs.
Indeed, the state of the newspaper industry has become so dire that U.S. Senator Benjamin Cardin introduced a bill on Tuesday that would grant non-profit status (and the tax breaks that come with it) to ailing newspapers to give them a chance to restructure their business.
Image credit: Trulia blog
Shutting Down the Presses
In the last couple of weeks, a growing number of newspapers have moved their businesses completely online. Just last week, the Seattle P-I announced that it was going to become an online-only publication with a reduced staff (and the latest data shows that the traffic on the site has actually gone down since then).
Laying Off Journalists
The New York Times, sold its venerable headquarters in a lease-back deal earlier this month and will now cut about 100 non-union, non-newsroom jobs. Last year, the Times already cut 100 of its 1332 newsroom jobs. This week, the company also announced that it also plans to cut salaries by 5%. The Houston Chronicle just laid off 12% of its staff – and the list of papers that have ceased publication on the Newspaper Death Watch blog continues to grow.
Note: we mistakenly reported that the times had laid off 100 newsroom workers this week, however, the Times only cut non-newsroom staff this week – most of the cuts in the news division happened last year and the Times actually promises that it will not lay off anymore newsroom staff this year (which, given the current situation, might be overly optimistic in our opinion).
The Breaking Point: Are We There Yet?
One thing is clear: a lot of newspaper are about to hit their breaking point. While there was already a trend towards online publications, the current economic climate is only accelerating this process. Gimmicky experiments like a custom newspaper that readers can print at home will do little to reverse this trend. Indeed, while some forms of printed newspapers (think free, fully advertising-financed newspapers distributed at train stations in Europe, for example) will most likely continue to be around for a while, the future of the industry is clearly online.
CC-licensed image used courtesy of Flickr user purdman1.
