Posted by chicagomedia.org on April 12, 2009 at 16:44:10:
Newspapers' ad revenue flowed in until recently, but damage was done
Phil Rosenthal | Chicago Tribune Media
April 12, 2009
Newspaper circulation figures for the six-month period that ended in March will be released later this month, and I'll go out on a limb and predict the industry's numbers will be down.
We'll hear that some of it is the result of deliberately paring distribution the papers have decided isn't cost-effective. And in a nod to the Internet, which has blown up the old business model, there will be the line about how the content is seen by more people than ever before.
Want to know the truth? Circulation is only a means to an end in that it helps determine the rates advertisers pay. Like the number of hits a team gets in baseball, it is hardly the best way to keep score. Runs are what win games.
Runs are revenue.
Overall daily newspaper paid circulation in this country peaked in 1990 and has declined each year since 1993, according to the Newspaper Association of America, while the industry's ad revenue didn't top out until 2005. Over the next three years, however, print ad revenue dropped by 26 percent. Even with their online money thrown in, newspapers' overall ad take fell by 23 percent.
And trends so far this year, with advertisers feeling the recession's pinch, aren't pretty.
If anyone wonders why the newspaper industry was so slow to respond to the changing marketplace even as circulation dipped, the answer is that the money long kept pouring in, regardless.
Circulation is circulation.
Revenue figures are vital signs.