Print ad sales hit 10-year low (Dinosaur Media DeathWatch™)

Reflections of a Newsosaur ^ | August 31 2007 | Alan D. Mutter

[Milhous]

After six straight quarters of accelerating declines, newspaper print advertising sales in the first half of this year fell to the lowest level in a decade, according to statistics released today by the Newspaper Association of America.

Print revenues in the first six months of this year totaled $20.3 billion, the lowest since the $19.7 billion in sales recorded in the first half of 1997. Print ad sales in the first half of this year were 8.3% below the depressed level recorded in the same period in 2006.

Although the NAA touted a 19% increase in online ad sales to $796 million in the second quarter of the year in spin-rich press release on the eve of the Labor Day weekend, print ad sales represented a bit more than 93% of the industry’s total volume of $22.49 billion in the first half of the year.

But let's get one thing straight: Improving online sales, while a good thing, won’t help an industry whose primary revenue base has been eroding at an ever-quickening rate for six straight quarters.

The sales plunge in the first six months of the year, which occurred despite a robust economy, was paced by a 14.8% collapse in revenues from the three principal classified advertising categories – auto, real estate and recruitment. Sales of the Big Three classified categories were $6.8 billion in the first half of this year vs. just shy of $8 billion in the prior year.

The extent of the classified sales debacle is illustrated in the graph below. What the graph doesn’t show is that auto classifieds have not shown positive sales growth since the first quarter of 2004.

Help-wanted advertising last gained sales in the first quarter of 2006, but here's the back-story: Recruitment advertising, which hit an all-time record of $8.7 billion in the final year of the dot-bomb era, amounted to only $4.7 billion at yearend 2006. Thus, $4 billion in revenues have vaporized in the a single category in half-a-dozen years.

Real estate, which had been the one bright spot in classified advertising as the housing bubble inflated, has deteriorated with a vengeance since the start of this year. Remember that the sub-prime mortgage meltdown occurred after the period covered by these numbers. With the real estate market all but paralyzed, the year-to-date declines are almost certain to be equaled – or surpassed – for the balance of 2007, if not beyond.

With consumers worried about the level of their household debt and the declining value of their homes, it stands to reason that advertisers will be more conservative about their spending in the second half of the year than they were in the first six months.

Ergo, no relief in sight.

[Milhous]

Marketing, not technology skills will soon be the most valued for journalists

Differences of opinion are beginning to emerge regarding which skills journalists will need most to survive. MediaShift says digital technology skills, Scott Karp is banking on collaboration, and Jeff Jarvis insists blogging skills are a must. All seem reasonable. But there is a new theme emerging — a skill recently referred to as “audience understanding.” Dean John Lavine of Northwestern’s Medill School of Journalism, who is dramatically revamping his curriculum, put it this way: “Our job is to create journalists who can win and hold the attention of media consumers faced with limited time and abundant media choices.”

Everywhere else but in journalism “audience understanding” is known as “marketing,” a discipline the news industry in the past century has largely ignored, if not derisively dismissed. They have had this luxury because they have faced little competition due to the one-paper-per-town economics of newspapers, government broadcast regulations that have limited the number of competitors, and the anti-competitive business practices of papers collaborating through the Associated Press network. But suddenly, there are competitors everywhere. Cable TV, Internet news sites, bloggers, and the most feared competitor of them all, Rupert Murdoch.

Journalists who have the talent to attract, maintain, and build audiences will be the most sought after. In the past, opinion-leading journalists Bill Kovach and Tom Rosenstiel preached “journalism’s first loyalty is to citizens…citizens are not customers.” In the future, journalists will recite a mantra that is new, but only to them — “the customer is always right.”

[Milhous]

Celebrating 75 Years of Tyranny by The Media Mob

The Milhous Chronicles

Print is the sharpest and the strongest weapon of our party. - Joseph Stalin

The Powers That Be make the editorial side of the Washington Post as powerful as the business side.

Bradlee had gone to his first budget meeting with Sweeterman, and Sweeterman, smart and informed, had eaten him alive and spit out the pieces. Bradlee had not done his homework, he had been talking ideas and ideals, and Sweeterman had been talking facts. Sweeterman was marvelous with figures, he could in one breath make the Post seem the best-run and most successful newspaper in the country, and in the next breath, without any change of voice or loss of credibility, could show how vulnerable the entire operation was, how inflation was eating the profits away.

The first time, the ball game had gone to Sweeterman, and Bradlee, with his great visions of his own new empire, of many foreign correspondents (in spite of the fact that foreign news bored him), had settled for one foreign reporter. The next year Bradlee prepared himself; he studied the finances of the paper as no editorial executive before him had ever done, he studied the mechanical side too, and he knew where the fat was; he knew what correspondents cost, and what he was entitled to. He had a further advantage in the fact that he could deal readily and easily with Kay Graham and Sweeterman could not; Sweeterman was awkward with her. Ben Bradlee made plain that he had been anointed by her, and that she had committed herself to the idea of a great national newspaper.

... It was a source of special power for Bradlee: challenging him was like challenging Kay. Their relationship, close friends thought, was unconsciously almost sexual.

... Bradlee made his demands, and outlined what they were going to accomplish for the paper, and these were big numbers, a jump in the budget of several million dollars over a very brief period. Sweeterman quickly gave in. ... It set the tone for the future; for the first time in the modern era the editorial side of the Post had power equal to that of the business side.

[Texas Eagle]

What’s a newspaper?

[Grampa Dave]

“But let’s get one thing straight: Improving online sales, while a good thing, won’t help an industry whose primary revenue base has been eroding at an ever-quickening rate for six straight quarters.”

“The sales plunge in the first six months of the year, which occurred despite a robust economy, was paced by a 14.8% collapse in revenues from the three principal classified advertising categories – auto, real estate and recruitment. Sales of the Big Three classified categories were $6.8 billion in the first half of this year vs. just shy of $8 billion in the prior year.”

Hilliary has a “HSU, your sugar daddy, day!”, and now this good news.

[Milhous]

Dinosaur media best enjoy their improving online sales while they last.

Google Cuts Deal With AP: Blow To Other News Sites

Peter Kafka August 31, 2007 2:36 PM

Google just made life more difficult for many online publishers: The search giant has struck a deal with the AP and three other newswires to host their stories on its Google News page instead of sending readers to the stories on other sites.

A host of publishers who run AP stories currently enjoy a nice traffic boost from Google News, which displays AP headlines but publishes links to outside sites. Now, says AP writer Michael Liedtke, that will change: Google will instead host full stories from the AP, Agence France-Presse, The Press Association in the United Kingdom, and The Canadian Press. Liedtke suggests that the change has already been made, but we don't see it yet: Type in "Google News" into Google News and the second story you'll find is Liedtke's story under a link to the Seattle Post-Intelligencer.

Google already pays the AP and the other wires an undisclosed amount for the right to publish the links, and says it doesn't have plans to sell ads next to the wire stories it runs.  That could change obviously.  And in the meantime, the change will certainly reduce traffic at a range of web sites that license and publish AP content.

[VOA]

Google just made life more difficult for many online publishers:
The search giant has struck a deal with the AP and three other
newswires to host their stories on its Google News page
instead of sending readers to the stories on other sites.

Google Executives: SCREW DIVERSITY!!! Let's make money on
non-inclusive (=exclusive) deals!
Our stockholders want profits...not diversity of opinion!

[Grampa Dave]

Consolidation will become the new word from hell for those in the media.

[Milhous]

Consolidation will become the new word from hell for those in the media.

Cornering groupthink into one place where we can poke it with sharp sticks and laugh.

[TenthAmendmentChampion]

Ping!

[TenthAmendmentChampion]

lol!

[george76]

The media will try everything except the one thing that might make a difference.

The editors and writers may play stupid, but the board of directors are killing the company.

[Secret Agent Man]

feelin SO FRIGGIN’GOOD about this....

[Secret Agent Man]

They are the things that used to be oxygen producing, carbon dioxide, soil saving trees.

How un-pc and backwards is it to print news on paper given ‘global warming’. (I don’t believe in global warming, but it’s nice to throw their own junk science back in their faces.)

[conservatism_IS_compassion]

Dinosaur Media Death Watch item:

I have in hand a copy of

News over the Wires:
The Telegraph and the Flow of Public Information in America, 1844-1897
(Harvard Studies in Business History)
by Menahem Blondheim (1994)

And I quote:

But with the appearance of the telegraph . . . private communications again had the temporal advantage over newspaper news, which appeared only at fixed intervals and became available only after typesetting and printing. Thus, with the advent of the telegraph, the press stood to lose its exclusivity in presenting the earliest news.

James Gordon Bennett, an acknowledged leader of the newspapers' news revolution, keenly realized the danger that the telegraph posed to the newspaper industry, and he initially was pessimistic about the fate of the press in the telegraphic age. "the telegraph may not affect magazine literature," surmised Bennett, "But the mere newspapers - the circulators of intelligence merely - must submit to destiny, and go out of existence." The Alexandria Gazette similarly assumed that since, with the telegraph, the public would be "furnished promptly . . . with the great events of the day," the press would have to limit itself to "examining causes, tracing effects, enlightening the judgments, and directing the reflections of men." In short, it would have to limit itself to an editorial function.

A century and a half later, it looks like the Internet is finally having exactly that effect - and, with FR, it produces superior editorial analysis as well. And the internet is more efficient for classified advertising.

[abb]

This looks to be an interesting read. The analogy between the internet and the telegraph is apt. I also want to read some accurate history (if there is such a thing, lol) on Gutenberg. The Church was horrified at the prospect of power loss.

I’ve just finished Halberstam’s The Powers That Be. I recommend it highly.

[abb]

http://books.google.com/books?id=cKVhOdpieXoC&dq=news+over+the+wires+the+telegraph+and+the+flow+of+public+information+in+america+%221844+1897%22&printsec=frontcover&source=web&ots=LFevjH2KMu&sig=gw-f0b0Gpqr9xjUH4opQ9tDoTf8#PPA118,M1

[Milhous]

Google's deal with AP seems like a watershed moment for national media to me. Early last year Rick Edmonds speculated on AP strategy in a two-part series: The New Associated Press: Under Construction and The New Associated Press: A News Strategy to Fill the Gaps. In the first installment Edmonds correctly surmises ongoing negotiations between Google and AP,

"We are still a business-to-business company," said [Jim Kennedy, AP strategic planning director] "That will remain."

But when the business in question is Google, the relationship gets dicey. AP does have a licensing agreement, terms confidential, with Yahoo! and AOL. Google? Kennedy, usually voluble, hung his head when asked. "That's a problem."

[Tom Curley, AP CEO] was not a lot more forthcoming. "Well, we're not suing Google," he said, alluding to Agence France Presse, which did just that a year ago, and immediately had all links to its content dropped from Google services, a loss of exposure that may hurt more than being ripped off might hurt. The AP's most direct competitor, Reuters, to date has welcomed Google links and has sought to be featured in Google Finance, launched in beta format last week.

So Google is essentially helping itself to AP content for free? "I wouldn't characterize it that way," Curley said. A Google spokesperson said the company would not comment on ongoing negotiations, which suggests that Google and AP are talking.

The prominent media titans who make up the vast majority of AP Directors apparently feel comfortable with a deal that tries to leave no money on the table regarding google's usage of AP stories. Perhaps Curley makes this tactical move under duress in trying to continue to make payroll for AP's 4,100 AP editorial, communications and administrative employees worldwide. On Jeff Jarvis' thread about this deal Steve Boriss says:

Jeff, The problem is not Google. It is the AP. What newspapers do not yet realize, and may never realize, is that they have established, funded, and shared stories with an organization that now competes with them. I’ll probably be posting on this Sunday night (Steve Boriss, The Future of News)

Allow me to embellish Boriss' take by speculating that national media now competes with other national media and the AP. Think google enhanced AP walmarting its national media competition. Jarvis' thread also contains a most interesting post by Isaac Sabetai that highlights a growing rift between AP and the small newspaper publishers that make up the vast majority of AP's 1,500 U.S. daily newspaper members

Jeff - I agree with your post.

This deal can be a lifesaver and a wake up call for local newspapers.

In my 35k circ daily, AP is becoming less important and valued. Most days at least three of the four front-page stories are local and many days we don’t think a wire story is worthy of the frontpage. You often hear an editor grumble how much we’re paying AP and how little they’re delivering. On our Web site we have some automatic AP feeds but they’re at the bottom and don’t get many clicks.

I have a feeling some papers are questioning the value of AP since it’s so prevalent online and their stories are old news when the morning edition is printed. It’s only a matter of time before newspapers pull out of the AP.

When that happens, AP will take a huge budget hit. (Keep in mind there are only a few newspaper corps. Imagine if Gannett orders local papers to cut AP). Many local news stories on AP are from members and rewritten by AP. Those stories will vanish. AP will only have enough manpower and funds to cover major stories such as politics, wars, etc. They won’t have as many local stories for Google to sell targeted ads to. Google’s AP news will compete with national news outlets.

People seeking local news won’t find it on google or yahoo. They’ll get it from their local news outlet.

Now my scenario assumes many things like newspaper execs being forward thinking enough (hasn’t been the case). But Google’s deal should spur some papers into becoming more local and focusing on what they do that is unique.

[conservatism_IS_compassion]

Thanks for the link. That's the book, all right.

The thing that burns through - and which I've already mentioned myself, is the obvious point that journalism is so possessed by the moment - by what they can report that you haven't heard yet - that ultimately journalism is superficial. "There's nothing more worthless than yesterday's newspaper" is journalist-speak for "Always make your deadline," and that is just another way of saying that "the show must go on."

Meanwhile they claim to be "objective," when the reality is that they are utterly self-absorbed. Their "news" is ultimately about nothing but themselves, and about information that - for the nonce - you don't know. Except that, in the Internet age, you routinely see Big Journalism reports days and even weeks after you learned the information in those reports on the web. And some reports which you see on the web and consider highly significant, you do not see in the reports of Big Journalism at all.

Half the truth is often a great lie. - Benjamin Franklin

Why Broadcast Journalism is
Unnecessary and Illegitimate

[abb]

http://thefutureofnews.com/2007/09/02/google-deal-uncovers-truth-that-ap-is-now-a-competitor-to-newspapers-and-papers-are-suckers-for-being-members-of-it/

Google deal uncovers truth that AP is now a competitor to newspapers, and papers are suckers for being members of it 9/2/07
Posted by Steve Boriss in GoogleNews, AP. trackback
As reported by Jeff Jarvis and many others, Google News has just reached the incredibly obvious conclusion that its readers would rather not wade through dozens of nearly identical versions of the same original AP story that are published by its member papers. So, striking a deal with AP and three foreign wire services, Google News will now feature the originating wire service’s story, reducing the prominence and interest in similar members’ stories, and depriving members of their future lifeblood — advertiser revenues from Internet traffic.

The question AP member papers should now be asking is not how Google could be so mean, but how they, themselves could be so blind (and that’s putting it nicely). These newspapers established, and now fund, theoretically control, and contribute their own local stories to the allegedly “not-for-profit” AP. But with their members’ money and content, AP first grew into a leviathan with an empire of more than 240 bureaus and 4,000 employees worldwide, and now into a cross between a Frankenstein that has turned on its master and a Dracula that is sucking its blood. Being a member of the AP made sense when papers were necessary middlemen for people to get their news — papers would pay the AP for electronically-transmitted stories, then reprint them and sell them for a profit to a public that had no better access to the freshest news. But now that the Internet and Google News have essentially installed an AP News Terminal on the PC of everyone with broadband service, newspapers who are members of the AP are funding their own destruction. AP members would be better off sitting in their newsrooms, launching their word processors, typing in “According to the Associated Press,” then copying and pasting from Google News, modifying the content every once in awhile to avoid copyright litigation.

Challenge to the AP: I have been raising the above issue for months (e.g. here and here), and have suggested (here, here, and here) that the AP for more than a century has essentially been a cartel, and largely to blame for Americans only receiving a single set of news stories/angles (affectionately called the “National Conversation”) in a country with an infinite supply of them, violating Thomas Jefferson’s vision of news as a multitude of voices competing in a freewheeling marketplace of ideas. I have not heard a peep in way of a defense from any of your 4,000+ employees in 240+ bureaus worldwide. If I am mistaken, please let my readers know by posting comments, and I will retract any errors I have made. If no such comments are posted, their absence will speak for itself.