Newspaper Ad Revenue in Freefall

The headscratching continues in newsrooms across the land, as executives are perplexed as to why ad revenues continue to plummet (via Instapundit).

This may be an overly simplistic explanation, but two words come to mind: liberal bias.

At USA Today, the nation’s biggest newspaper, ad revenue was down 14 percent this February, compared with February last year. Gannett, which owns USA Today and is the nation’s biggest newspaper company, reported that its overall ad revenue declined 3.8 percent in February from February 2006.

Ad revenue at The New York Times Company fell 6 percent overall, declining 7.5 percent at The New York Times; ad revenue at the company’s New England Media Group, which includes The Boston Globe, was down 4 percent. At The Wall Street Journal, published by Dow Jones, it was off 10 percent.

The Tribune Company, whose papers include The Los Angeles Times, The Chicago Tribune and The Baltimore Sun, reported losses of more than 5 percent. So did McClatchy, whose papers include The Miami Herald, The Sacramento Bee and The Lexington Herald-Leader in Kentucky.

Even papers in smaller markets, which are shielded from some of the forces buffeting some of the bigger metro dailies, saw losses in February. Ad revenue for the publishing division of Media General, which owns The Tampa Tribune, The Richmond Times-Dispatch and The Winston-Salem Journal, were down 5.8 percent.

There's no denying the overwhelming majority of newspapers lean far to the left. That point is no longer debatable. Still, online ad revenue rose, so they're not exactly going out of business--just yet. But just like their counterparts at the television networks who are losing their viewers in droves, those running these operations seem reluctant to admit the error of their ways and continue moving away from their audience.

I take no particular joy in seeing the decline of this medium, as I have friends and former colleagues still in the business. But there is a supreme arrogance when it comes to the media that turns off so many people. Most of that is denial of the obvious and the unwillingness to admit they have a problem, instead choosing to look elsewhere to point fingers.

The newspaper companies blamed the declines largely on the continuing shift of classified advertisers from print to online, especially to mostly free sites like Craig’s List. In some cases, particularly in Florida and California, they traced the weaknesses to volatile real estate markets.

The shift away from traditional readership and a younger audience is a factor, as well as people just no longer having time to spend reading a paper from front to back.

Online spending is projected to continue to grow, and many newspapers are investing more and more in their Web sites. But so far, the online revenue is too small to begin to compensate for the losses from print advertising.

Mr. Parr, the Jupiter analyst, said that gap was going to force the industry to adapt to survive and that the February results were just a symptom of this larger struggle.

“There is absolutely no question that the next 10 years are going to be really bad for the newspaper business,” he said. “This is a time of wrenching change and chaos. All of our assumptions about newspapers are going to be changed. The format, the business model, the organization of newspapers have outlived their usefulness.”

Part of that restructuring should involve reaching out to the audience they've lost, though I'd venture to say in most cases, those former readers are not coming back. Alternative media have made inroads and people are more willing to cherrypick their news from various sources rather than rely on one newspaper for their information. Newspapers should also consider their allegiance to the wire services, the Associated Press and Reuters, in particular.

They're paying a price for their arrogance.