I know. Such kind of entry looks like the Monday Note’s weekly shot of pessimism. OK, but ignorance does not deflect peril. Then, let’s have a look at the latest data extracted from a recent article in the New York Times about the US market:
- Adjusted for inflation, 2007 ad revenue was more than 20% below its peak in 2000
- Since 2003, the number of copies sold has bee slipping about 2% a year
- Papers like the Boston Globe, SF Chronicle, or LA Times (see Monday Note #20) have lost 20 to 30% of their circulation in just a few years
- Newspapers execs and an analysts said than it could take 5 to 10 years for the newspaper industry to stabilize – also because operating profit margin remain high (often in the 15%-20% range for big media groups) even if the dollar amount is falling. (Money loosing business like steel or manufacturing are much faster to adjust).
- From a revenue perspective, the Internet is not likely to be a substitute : when an advertiser pays $1 to reach a print reader, it pays only 5 cents to reach an internet reader. In other words, newsrooms and journalistic ambition will have to downsize dramatically.