Friday, January 23, 2015

Newsonomics: How deep is the newspaper industry’s money hole?

Ken Doctor reporting:
How big a hole is the U.S. daily newspaper industry in?
We know the toll in newsroom jobs — about 20,000 lost in a little under a decade — and the fact that the industry as a whole took in about $26 billion less in 2014 than it did a decade earlier. We’re used to, and fairly inured to, those numbers. So let’s ask a new question: How close is the industry as a whole to reversing its long slump? That’s an answer we can quantify.
In 2013, total revenue in the U.S. industry totaled $37.5 billion, accordingto NAA. That number was down an even one billion dollars, or 2.5 percent, from the year before. The difference between its actual performance and what it would have needed to get to the new normal: $1.4 billion. With a revenue of $38.9 billion, the industry would have grown one percent and stayed even with inflation. The industry missed a new normal by about 4 percent.
It may seem like a small number, but it’s been a mountainous goal. The industry hasn’t overall seen revenue growth at all (much less with inflation taken into account) since 2007. The continued declines in print advertising — down in the high single digits, percentage-wise, year after year — have been too big for other revenue sources to make up the difference.
...Think of industry’s potential revenue growth buckets as three-fold: reader revenue, digital advertising, and what we’ll call the Third Stream.....
..The Third Stream The situation: In 2013, what NAA considers “newly developing” revenue came in at $3.15 billion. Notably, this is the fastest growing play publishers have, growing a little faster than circ revenue.What’s in this bucket? It’s things like commercial printing, distribution of other products (e.g., other newspapers), event marketing, e-commerce and marketing services...

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