Updated from 1:24 p.m.
Everyone knew it was bad out there, but maybe not
Figures that size up just how tough business has been for newspaper publishers were released sotto voce by an industry trade group last week, but word began to spread only over the last few days: Sales of print ads during the first quarter fell nearly 30% industry-wide, according to the Newspaper Association of America -- the worst drop since record-keeping began, in 1950.
To put it another way: Even assuming that sales remain flat for the rest of the year, print ad sales will have fallen to levels -- about $26 billion in total for the industry -- not seen since 1986.
The numbers were enough to make one want to rewrite the old saw: Freedom of the press belongs only to those who own one -- but who would want to?
It would appear that most investors certainly don't. Newspaper stocks were broadly lower across the board Tuesday. The
New York Times
was down 8%, the
was off 10%, and
was down 5.3%.
, publisher of the
Wall Street Journal
New York Post
among other titles, had inched higher by a few cents, or just over 1%.
"What we're seeing is an accelerating rate of decline across all advertising categories, which is beyond the worst-case scenario," said Edward Atorino, an analyst with the Benchmark Co., as he looked over the figures on the NAA web site for the first time. He paused to take another look, and then he said, "This is really horrible."
As is its wont, the NAA released its quarterly statistics on its site way back on Thursday without really alerting anyone to the fact. That's been the group's modus operandi for years, but during times such as these, it seems like a premeditated strategy.
Retail and classified ads were hit the worst, the NAA's figures indicated. Again, on the face of it, that's unsurprising news, given the severity of the recession and the ubiquity of free online classified sites like craigslist. But the degree of the falloff startled even the most jaundiced of media watchers. Retail ad sales fell almost 24%; classified sales dropped by 42%.
The group's president, John Sturm, did issue a prepared statement that blamed the economy and then went on to promise a return to sunnier times, but in light of the raw data, it was hard not to read his words as perfunctory in the purest sense. "As newspapers continue to innovate -- in print and online, and develop new ways to serve advertisers and consumers -- we are confident our medium will be well-positioned once the economy turns around."
The problem, of course, is that no one has any clear idea what those innovations might be. Online ads -- which are often sold as a package along with print ads -- have not brought in nearly enough revenue to offset the vanished cash flow elsewhere. Indeed, the NAA's figures say web sales fell 13% in the first quarter.
For his part, Carlos Slim, the Mexican billionaire who will soon become the biggest shareholder of the New York Times, said in a
profile that he expects the newspaper he owns a large chunk of to one day be digital only. Hardly revolutionary stuff, but it demonstrates perhaps how big business views traditional media: that is, kaput.
The NAA data went up on the group's web site on the very same day -- Thursday -- that it convened a conference of the industry's top executives near Chicago to discuss the very subject Slim addressed in the profile (which appeared only in a print magazine, it might bear remarking). The meeting had an air of desperation about it: the business model is no longer viable -- as the data seems to be demonstrating -- so how do we fix it, or come up with another one?
Chief among the concerns at the conference, which bore the cringingly corporate-speak title "Models to Lawfully Monetize Content," was whether and how to charge money for newspapers' generally quite popular -- but free -- web sites.
According to one media blog, Steve Brill, the media entrepreneur and former journalist, attended the conference to pitch something called Journalism Online, a Brill venture that is, in essence, a piece of e-commerce software that does the work of charging so-called "micropayments" from Web surfers who want to buy an article in full.
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