GANAHL ON MEDIA: How Dire Is It?

Today more people rely on the Internet than newspapers for national and international news. For those involved in traditional media, the question of the moment is survival. How threatened are traditional media? How deep is this crisis, and when will it get better?

In a word…the crisis is dire. Hopefully it will get better, but this may take a very long time.

Consider total reported advertising revenues for the first half of 2009. Advertising Age reports that overall ad revenues measured by Nielsen are down almost 16% during the first 6 months 0f 2009 when compared with the same period in 2008.

The only two media categories among the 19 measured categories reporting increases during the first half of 2009 are Cable TV with a 1.5% increase and Spanish Language Cable TV with a 0.6% increase. Internet ad spending is down 1% during this period. Please see the table titled Year-to-Year Change in Ad Spend, by Media published September 2, 2009 in Advertising Age.Ad Age

The media most impacted by this crisis are newspapers. Richard Pe’rez-Pena reports in The New York Times that newspaper revenues fell almost 29% during the first half of 2009 according to the Newspaper Association of America. Also, the NAA reports that the current rate of decline in newspaper ad revenues is accelerating from the 2007 decline of 16.7%, and the 2006 decline 7.9%.

More over, the current precipitous decline represents long-term erosion in newspaper ad revenues. Ryan Chittum concludes in the Columbia Journalism Review that “(the 2009 decline) understates just how awful the numbers are…You have to go back to 1965 to find a year with revenue lower in 2009 dollars than what this year is projected to be.” Do the math…newspapers are an industry with revenues little improved for almost 45 years ago!

Declines in newspaper circulation mirror its revenue declines. The NAA reports paid circulation for daily newspapers totals 48.497 million in 2008. This translates to a 41.8% penetration level of the total 116 million US households in 2008. The last time paid circulation for daily newspapers totaled 48 million was in 1945! Paid circulation for daily newspapers peaked at 63.34 million in 1984.

There are several websites devoted to chronicling newspapers’ traumas. One of the most interesting is Paul Gillin’s Newspaper Death Watch. The NDW tracks those forces that Gillin thinks will “ultimately destroy 95% of American major metropolitan newspapers.” These forces include newspapers’ high fixed costs such as equipment, paper and labor.

Gillin calls himself an optimist and thinks “this painful decline will give birth to a new model of journalism built upon aggregation and reader-generated content.” His site lists 12 metropolitan dailies including the Rocky Mountain News and the Baltimore Sun that have closed since the site’s beginning in March 2007. It also lists 8 dailies including the Seattle Post-Intelligencer and the Ann Arbor News that have ‘adopted hybrid online/print or online-only models.’

Another site, paper cuts uses mapping software to depict ‘layoffs and buyouts at U.S. newspapers.’ St. Louis designer, journalist and site creator Erica Smith reports almost 32,000 newspaper jobs have been lost, and 31 daily and weekly newspapers have closed since June 2007. The site also reports salary and benefit reductions at various newspapers.

Of course other media are also severely impacted. Jason Fells reports in FOLIO that according to the Publishers Information Bureau consumer magazine ad pages fell almost 30% in the 2nd quarter of 2009 compared to the same 2008 time period. This compares to the 11.7% ad page decrease in 2008 when compared to 2007.

And, what about media’s future? How guarded are the predictions? Pe’rez-Pena reports in the NYT that while the rate of decline in advertising revenue seems to be slowing, many analysts think it will be 2010 before we see any substantial improvement.

Dr. Richard Ganahl is a professor in mass communications at Bloomsburg University, PA. His column GANAHL ON MEDIA is an occasional column about media issues. Ganahl is a former media manager, publisher, entrepreneur and consultant. He is co-editor with Dr. Louisa Ha of the award-winning Webcasting Worldwide (2007), and the founding faculty advisor of BU Now, a multi-media, student-managed media blog site.

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