Alan Mutter

The latest newspaper circulation numbers, measuring copies sold from April through September of this year, show a 10.6 percent decline in daily newspaper sales, the first double-digit drop in circulation ever. Newspaper readership is now at its lowest level since before World War II.

The biggest losers during this six-month period, as reported by NewsBusters's Tom Blumer, were the San Francisco Chronicle (down 25.8 percent daily), the Newark Star-Ledger (down 22.2 percent daily), and the Boston Globe (down 18.5 percent daily).

The New York Times's sales during the period fell to 927,861, the first time the paper sold less than 1 million copies in that time span in decades. The Wall Street Journal saw a 0.6 percent increase in circulation, making it the most purchased newspaper in the country. The Journal surpassed USA Today, whose circulation declined by over 17 percent.

Rupert Murdoch has become the first media mogul to make bold changes to his company’s newspaper monetization strategy that may reshape the way people receive their news--by paying for it.

Up to this point, web publications have primarily relied on advertising alone for revenues but this has had problems because online advertising rates are so much lower than those in print. Murdoch and others in the traditional media are seeking to change that by creating a system where readers and viewers are required to pay a subscription fee as well.

There is certainly a motivation to try something different. Overall, News Corp.’s operating income dropped by over 30 percent in its latest earning report. Its cable networks are the only holdings to be driving growth this year, with Fox News’ operating income increasing by 50 percent.

Clearly, much of News Corp.’s struggles are due to the recession, but newspapers have been struggling long before the recession. With content available for free online, fewer people are paying to subscribe to newspapers and magazines.

Americans have been reluctant to pay for subscription fees for news content online, especially after having received it for free for fifteen years, so will News. Corp’s plan succeed? There are not many details as of yet on what kind of subscription plans Murdoch plans to establish, but there has been a lot of attention as of late on a plan put forth by newspaper editor-turned Silicon Valley CEO Alan Mutter. At a meeting of newspaper executives in May, Mutter talked about his new venture, ViewPass.

Some call it "the dead tree edition" of the news media. But as 2009 dawns, trees may not be the only casualties.

Newspaper companies as an investment are less lucrative than they once were. Alan D. Mutter, a Silicon Valley CEO, pointed out on his blog that newspaper companies took a hit in 2008 in terms of share value to the tune of $64 billion.

"In the worst year in history for publishers, newspaper shares dropped an average of 83.3% in 2008, wiping out $64.5 billion in market value in just 12 months," Mutter wrote on Jan. 1. "Although things were tough for all sorts of businesses in the face of the worst economic slump since the 1930s, the decline among the newspaper shares last year was more than twice as deep as the 38.5% drop suffered by the Standard and Poor's average of 500 stocks."