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Death of Newspapers Puts $42 Billion of Ad Revenue Up For Grabs (Dinosaur Media DeathWatchâ„¢)
Yahoo Biz ^ | May 1, 2008 | Henry Blodget

Posted on 05/01/2008 5:02:21 PM PDT by abb

How bad are things in the (print) newspaper industry? Don't ask. After another jarring 3.5% decline over the past six months, print-paper circulation will drop to about 50 million this year--the lowest level since 1946 (62 years ago).

That's during a period in which the US population has doubled, meaning that per-capita newspaper consumption has been cut in half. For more on this horrorshow, read the latest from the Dean of Newspaper Demise, Alan D. Mutter, at Newsosaur. Just don't do it if you've got friends or family (or money) in the industry.

If your career, portfolio, or fortune isn't tied to the newspaper business, however, rejoice. The newspaper industry's loss is your gain!

In ten years, print-paper circulation and ad revenue will likely be a quarter of what it is today, if that.

Why? Because:

* As circulations and ad revenue continue to fall, print economies-of-scale will reverse, cutting further into already shrinking print margins. * As "green business" practices take hold, a new generation of consumers will come to view the newspaper industry as a horrifically wasteful polluter that eats forests, gobbles fuel and electricity, and farts untold amounts of hydrocarbons into the atmosphere--all to deliver information that might have been interesting yesterday. * A generation of newspaper ad salespeople and ad sales buyers will gradually retire or quit, and advertisers will increasingly ask themselves why they are spending billions on ads they have no idea whether anyone looks at. * As financial and environmental pressures increase and a better grasp of reality sets in, more papers will opt to do what the Capital Times of Madison, Wisconsin, did last weekend: Shut down their print businesses, fire a third of their staff, and put what's left online.

And good riddance--if not to the staff, at least to papers. And a hearty welcome to a slightly cleaner atmosphere and less need for recycling.

And here's some more good news: The $42 billion that was spent on print newspapers in 2007 isn't going to vaporize--it's just going to go somewhere else. ($42 billion--in the US alone!)

Where's it going?

Here's one guess:

Fate of $42 Billion of 2007 Newspaper Print Ad Spending in 2017

* Surviving newspapers: $10 billion (25%) * Magazines: $0 * TV: $0 * Outdoor: $2 billion (5%) * Digital: $30 billion (70%)

And what about the newspaper companies--won't they be fine because of their web sites? No, at least not without major restructuring and pain.

Newspaper web sites are only capturing a fraction of the print revenue the papers are losing, and the growth of newspaper sites has already started to slow. As the chart below shows, in 2007, the industry lost 8%, or $4 billion of advertising including newspaper web sites. Newspaper sites will capture a small portion of that new $30 billion Digital pie, but probably not much more than $5 billion. Some newspaper companies will survive, but only after major restructuring.

In fact, here's another guess:

Fate of $30 Billion Migrating Online From Newspapers By 2017

Newspaper Web Sites: $5 billion (17%)

Google, Yahoo, Craigslist, eBay, Amazon, job sites, blogs, mobile ads, video ads, etc: $25 billion (83%)

So if you're in the digital advertising business, that's good news. $3 billion a year of incremental ad revenue flowing toward you, without you even getting off your bum. Now all you have to do is fight like hell with all the other folks who have seen the future and want a piece of it.


TOPICS: Business/Economy; Culture/Society; Extended News; News/Current Events
KEYWORDS: advertising; dbm; newspapers; televsion

1 posted on 05/01/2008 5:02:22 PM PDT by abb
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To: 04-Bravo; aimhigh; andyandval; Arizona Carolyn; backhoe; Bahbah; bert; bilhosty; Caipirabob; ...

ping


2 posted on 05/01/2008 5:03:00 PM PDT by abb (Organized Journalism: Marxist-style collectivism applied to information sharing)
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To: abb

Die, die NYT, die, die Washington Post.


3 posted on 05/01/2008 5:05:22 PM PDT by 353FMG (Don't make the mistake to think that Government is a Friend of the People)
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To: 353FMG
I feel sorry for the working stiffs at Gannett Corp, a major chain, but I'll cheer it's demise along with anything the Chandler Family* put money into.


*The Chandlers were the slime that owned the LA Times for over a century.

4 posted on 05/01/2008 5:10:32 PM PDT by investigateworld ( Abortion stops a beating heart.)
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To: Grampa Dave

Maybe that money could benefit Napa county with banner ads on bottles Chardonnay labels?


5 posted on 05/01/2008 5:15:08 PM PDT by tubebender (and just like that I lost another tag line to Bo...)
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To: abb
As "green business" practices take hold, a new generation of consumers will come to view the newspaper industry as a horrifically wasteful polluter that eats forests, gobbles fuel and electricity, and farts untold amounts of hydrocarbons into the atmosphere--all to deliver information that might have been interesting yesterday.

I like it.

6 posted on 05/01/2008 5:37:15 PM PDT by Cicero (Marcus Tullius)
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To: Diplomat
In another thread you said:
The networks are almost guaranteed to make money every other year (and certainly every 4th year) based on political campaign advertisement purchases alone.

... given the near billion that Obama/Hillary has raised already during just the primary elections, CBS is most certainly getting a cut of that share.
Allow me to put one billion every four years into perspective by referring you to the title of this thread.
7 posted on 05/01/2008 5:37:22 PM PDT by Milhous (Gn 22:17 your descendants shall take possession of the gates of their enemies)
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To: Cicero

That one jumped out at me, too.


8 posted on 05/01/2008 5:38:29 PM PDT by abb (Organized Journalism: Marxist-style collectivism applied to information sharing)
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To: 353FMG
Some day when I tell the grandkids I was a paperboy once, they'll ask “what is a paperboy?”, and I'll say “be glad you don't know, kids used to deliver news printed on paper to houses on a route of paying subscribers, we were pretty primitive back then”.
9 posted on 05/01/2008 7:31:18 PM PDT by ME-262 (Nancy Pelosi is known to the state of CA to render Viagra ineffective causing reproductive harm.)
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To: investigateworld

I have hated Gannett papers just as vehemently as I’ve hated the NYSlimes for the last 20 years. I will be so happy when their bias is mostly eliminated from the public square.


10 posted on 05/01/2008 7:34:56 PM PDT by AFPhys ((.Praying for President Bush, our troops, their families, and all my American neighbors..))
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To: ME-262

It’s the “I walked 5 miles to school...uphill...both ways!” story for us. Only, due to the rapid pace of change, I can regale my own kids instead of grand-kids (that’s progress!). “We delivered newspapers, seven days a week, in all types of weather” and “We had a phone...which was attached to the wall...with a cord...and a dial that you turned to make a call.” and, what will really get their jaws to drop “We had a B&W TV...with no cable...and no remote control...and we made your uncle hold the antenna so the reception wasn’t blurry.” Ah, can’t wait. I will be and old-fogey before I am 40.


11 posted on 05/01/2008 7:59:24 PM PDT by 10Ring
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To: abb

It would indeed be delicious to see newspaper assualted as enviornmental degraders. For all the stories they’ve printed about carbon footprints, etc., to see them defend grinding up millions of trees and running millions of delivery truck miles each year!


12 posted on 05/01/2008 9:01:13 PM PDT by Uncledave
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To: tubebender

“Maybe that money could benefit Napa county with banner ads on bottles Chardonnay labels?”

It may end up that way. Last night we went to see Celtic Woman with a couple of friends. The wife is a very successful independent real estate lady realtor. We discussed this issue with her on the way into the performance, which was great.

She and other independents no longer advertise in the local fish wrap. The local Fish Wrap’s subscription total since the 2000 elections has fallen from over 30,000 daily to about 16,000, and the rates have gone up.

She and the others use a monthly free magazine and have good results with twice as many subscribers. She and many of the other independent realtors bailed between 2000 and 2004 because of the left wing stances of the paper and its local editors.

Now, the paper is less liberal since 2004 and tries to maintain a balance.


13 posted on 05/02/2008 8:03:37 AM PDT by Grampa Dave (Hussein ObamaSamma's Pastor, Jeremiah Wright: "God Damn America, U.S. to Blame for 9/11")
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To: Tribune7

ping


14 posted on 05/02/2008 5:04:15 PM PDT by Temple Owl (Excelsior! Onward and upward.)
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