An article in today’s New York Times depicted a grim picture of the future of America’s newspaper industry. Stung by declining circulation rates, most of the nation’s major dailies are laying people off:
“Such rethinking is sweeping newsrooms across the country as the industry faces a wave of job cuts, among them 700 announced since May at The New York Times Company, including its business operations and the various media properties it owns, and 14 at The Hartford Courant. Most recently cuts have been announced at The Boston Globe (a division of the Times Company), The San Jose Mercury News, The Philadelphia Daily News, The Baltimore Sun and Newsday, and over the last few years The Los Angeles Times, The Wall Street Journal and The Washington Post have also moved to eliminate jobs.
“Industrywide, ad revenue is flat, costs are up and circulation is eroding.”
The article went on to discuss how ad revenues at the major newspapers have stopped growing as major retailers have refocused their marketing dollars into other channels such as cable television and, of course, the Internet:
“At big papers, ad revenue has stalled for several reasons: a decline in local auto ads; the consolidation of department stores, especially the merger of Federated and May, and a march to the Internet by travel advertisers, hotels and car rental agencies. That exodus from print includes Hertz, which has not advertised in The New York Times for six months, a Times spokeswoman said. Movie ads are in a trough as box-office sales slump.”
As for the future of the print media industry:
“Over the next three years, advertisers are expected to devote 15 to 20 percent of their budgets to the Internet, up from 5 to 8 percent, according to David Verklin, chief executive of Carat Americas, a major media services firm. At the same time, newspapers are losing classified ads to Craigslist and eBay. And they are losing information-seekers to Google and Yahoo, which recycle news from media outlets and increasingly offer content of their own. As readers turn to these cyberbehemoths, advertisers follow.”