The Problem
February 2, 2009
For those of you who aren’t familiar with the current state of media and big news corporations, here is a quick review to get you up to date:
“Decline of US Newspapers Accelerating” TechCrunch
“Figures released by the Newspaper Association of America show that the decline of newspapers is more rapid than previously thought, with total print advertising revenue in 2007 plunging 9.4% to $42 billion compared to 2006, the biggest drop in revenue since 1950, the year they started tracking annual revenue.
Online provides some solace for the dead-tree business, with internet ad revenue growing 18.8% to $3.2 billion compared to 2006, but a rate significantly lower than the 31.4% growth the year before, and not even close to replacing the losses from print. Online revenue now represents 7.5% of total newspaper ad revenues.”
“Newspaper Circulation Continues to Decline Rapidly” New York Times
“The long decline in newspaper circulation over the years continues to accelerate, with sales in the spring and summer falling almost 5 percent from the previous year, figures released on Monday show, deepening the financial strain on the industry.”
“Tribune Co. Could be Flirting with Bankruptcy” New York Times
“New York Times, Tribune Company, NBC Announce Problems Monday” Huffington Post
“Three major media companies all revealed grim news Monday.”
“Times Co. Is in Talks to Sell Part of Building” New York Times
“The Times Company has been seeking various ways to raise money to pay down its debt. One of its two $400 million revolving credit lines will expire in May, but the company has said that it will not seek to renew the full amount.”
“Times Co. to Issue Debt” New York Times
“The New York Times Company is planning to raise $250 million by issuing notes and debentures to pay off debt. According to the offering notice, which was issued on Friday, the notes and debentures will be used to repay $162.3 million in debt related to newspaper acquisitions in 1985 and $50 million to pay off debt issued by Affiliated Publications Inc., the parent company of The Boston Globe.”
“Nielsen Online, a service of The Nielsen Company, today reported a 16 percent year-over-year increase in unique visitors to the top 10 newspaper Web sites, growing from 34.6 million unique visitors in December 2007 to 40.1 million in December 2008.
NYTimes.com was the number one online newspaper destination in December 2008, with 18.2 million unique visitors. USATODAY.com and washingtonpost.com took the No. 2 and No. 3 spots, with 11.4 million and 9.5 million unique visitors, respectivel.”
“NYT Web Traffic Up, Ad Revune Down” AdWeek
“Thus it seems apparent that as the economic recession deepens, traffic growth will not be enough to offset ad declines. NYT executives attributed November’s declines to a modest overall display ad market and weakness in recruitment and real estate advertising.”
“NYTimes.com Needs 7x More Traffic to Survive” Silicon Alley Insider
“‘Based on our research, the conversation [with advertisers] gets interesting at 200 million page views plus a month, but much more so around 800 million,’ ContentNext’s Lauren Rich Fine writes in a report.”
In short, print media is down and web traffic is up – but not enough to save the news industry. More page views lead to more ad revenues, and, right now, none of the major news corporations including the Times Co. which is leading the industry in Web site hits, is generating enough traffic to survive.
