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In his (always must-read) blog, Newsosaur, media consultant and former newspaper executive Alan Mutter challenges the view that the poor economy is the crux of newspapers’ problems, as some industry executives are suggesting: “It’s not the stupid economy, newspapers.”
Read his entire post, but here are a few excerpts:
“Newspaper ad sales didn’t just go the wrong way in 2007. They have been declining steadily since 2001, when the economy suffered the twin shocks of 9/11 and the tech collapse. Even after the economy rebounded in 2003, newspaper sales consistently trailed the growth of the gross domestic product. … Newspaper sales actually began falling in the second quarter of 2006 — even though the expansion continued for more than a year — and the rate of decline has accelerated ever since (chart here).
“The chief problem is in the classified advertising business that historically generated 40% of newspaper sales and more than 40% of their profits. Between 2000 and 2007, classified sales fell $5.4 billion, or 27.7% from where they stood at yearend 2000. Recruitment revenues in the period fell $4.9 billion, or 56.3%, to the lowest level in 13 years. Automotive classifieds slid $1.8 billion, or 35%, to the lowest level in 22 years.
“Real estate sales were the only major category showing consistent gains after 2000, but they plunged sharply in 2007, dropping $1.2 billion, or 22.6%, in a single year. Reasonable men and women may differ as to whether, when and how the realty market will recover now that the federal government has decided to help (or not).
“Though today’s economy is perhaps the toughest in a generation, the industry’s problem began in the early days of the decade, when classified advertisers began forsaking high-priced print in favor of cheaper, highly targeted interactive media ranging from Craigs.ist to Dice to AutoTrader and Zillow.
“… While the jury may be out on the future of real estate advertising, there is no doubt that newspapers have lost their grip on at least two of the three key classified categories they used to own.”
What’s the answer? Don’t wait around for the economy to bounce back. Reinvent newspaper classifieds.
Tags: alan mutter
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