I posted a series of articles last summer on the theme of contraction in the U.S. newspaper industry, but it got to be an onerous, not to mention depressing, task.
Fortunately, this NYT article nicely wraps up how much things are sucking down there.
In just the last few weeks, The San Diego Union-Tribune eliminated more than 100 jobs, one-tenth of its work force. The Chicago Sun-Times began a major round of newsroom layoffs, then put itself up for sale, and publishers in Minneapolis and Philadelphia warned that tough economics could force cuts there.
Not long ago, news like that would have drawn much commentary and hand-wringing in the newspaper business, but in the last few months, reductions have become so routine that they barely make a ripple outside each paper’s hometown. Since mid-2007, major downsizing — often coupled with grim financial reports — has been imposed at The San Francisco Chronicle, The Seattle Times, The San Jose Mercury News, USA Today and many others.
The talk of newspapers’ demise is older than some of the reporters who write about it, but what is happening now is something new, something more serious than anyone has experienced in generations. Last year started badly and ended worse, with shrinking profits and tumbling stock prices, and 2008 is shaping up as more of the same, prompting louder talk about a dark turning point.
“I’m an optimist, but it is very hard to be positive about what’s going on,” said Brian P. Tierney, publisher of The Philadelphia Inquirer and The Philadelphia Daily News. “The next few years are transitional, and I think some papers aren’t going to make it.”
Advertising, the source of more than 80 percent of newspaper revenue, traditionally rose and fell with the overall economy. But in the last 12 to 18 months, that link has been broken, and executives do not expect to be able to repair it completely anytime soon.
In 2007, combined print and online ad revenue fell about 7 percent. In the last six decades, only one other year — 2001, when there was a recession — had a steeper decline, according to the Newspaper Association of America. Adjusted for inflation, 2007 ad revenue was more than 20 percent below its peak in 2000.
Circulation revenue has declined steadily since 2003, and the number of copies sold has been slipping about 2 percent a year. Some of the largest papers — including The San Francisco Chronicle, The Boston Globe and The Los Angeles Times — have lost 20 to 30 percent of their circulation in just a few years.
The long-term shift of advertising to the Internet — especially classified ads for things like jobs, cars and houses — accelerated last year. The real estate downturn hit the newspaper business hard, especially in California and Florida, where real estate ads fell more than 20 percent at some newspapers.
Over all, local advertising has fallen, while “the national ad market is still strong,” said Alexia Quadrani, an analyst at Bear Stearns & Company. “Local advertisers have been swallowed up, and there are just fewer. Your local pharmacy becomes CVS; your local hardware store becomes Home Depot.”
In the last few days, several newspaper companies have reported weak December results, and they warned that January looked similarly bad and that the situation would worsen in a recession.
“The traditional cyclical factors are turning south at the same time as the structural factors,” said Ken Doctor, an industry analyst with the research firm Outsell. “It’s a very sobering time.”
Newspaper executives and analysts say that it could take five to 10 years for the industry’s finances to stabilize and that many of the papers that survive will be smaller and will practice less ambitious journalism.