In case it wasn’t obvious that newspapers are struggling, a new report by the Newspaper Association of America shows just how dire the situation has become.
In the first quarter of this year, ad revenues plummeted to $6.62 billion, marking a 28% drop from last year, according to the NAA. And it wasn’t only print ad revenue that fell. Web ad revenue also dropped 13%, to $696 million.
While all ad categories suffered declines, classifieds fell the furthest. First quarter classified revenue came to just $1.46 billion, marking a 42% drop from last year’s $2.5 billion and a 67% decline from the historical first-quarter high of $4.39 billion in 2000.
To some extent, the drop-off in display ads is a symptom of the current economic bust, given that marketing budgets are particularly sensitive to changes in the economy. Chances are that at least some of those ad dollars will return once the climate improves.
But it seems far-fetched to imagine that classified revenue will ever fully return, given the availability of online listings sites like Craigslist, which have surged in the last few years. Nearly half (49%) of all Web users say they have used an online classified site at least once, up from around one in five (22%) in 2005, according to a recent report by the Pew Internet & American Life Project.
Newspapers across the country are already dealing with the fallout, as executives shutter papers and slash budgets. The Senate has already held a hearing about the upheaval in the industry, and the Federal Trade Commission intends to hold workshops this fall to examine whether newspapers can survive the digital era.
Among other issues, the FTC might consider whether newspapers need some sort of antitrust exemption that would allow them to agree to start charging for online content. Currently, there’s nothing stopping individual papers from charging whatever they like for content, but they can’t collude to do so en masse.
Nonetheless, executives reportedly convened last week to discuss matters like charging for online content.
Of course, newspapers have tried charging for Web access before, but few besides The Wall Street Journal have been able to do so successfully. Even The New York Times abandoned an initiative to charge people for access to columnists. It’s not clear why newspapers think that people would be more willing to spend money now than in 2007, when the Times pulled the plug on its program.
By Wendy Davis
June 1, 2009
source: mediapost.com