This article is part of an occasional serie featuring interesting raw data. Use the tag “numbers” to see the previous entries.
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No predictions for this last 2008 issue. We all know what’s ahead: a difficult year, with double-digit drop in revenue for newspapers. A year that will see many news outlets simply wiped out. There will be opportunities, though. But for different types of organizations: smaller, leaner, and more agile. Flexibility will be a key factor. It will favor small companies or business units able to focus their reduced investment on what matters and cut the rest. Big organizations will stay absorbed in navel-gazing restructuring ruminations; their old-fashioned managements will keep forgetting that, even more in hard times than in good ones, speed is essential. We’ll come back with facts and figures next year. Today, I just want to offer interesting numbers, worth keeping in mind for the rough times ahead.
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40%. For the first time, the Internet ranks higher than newspapers as the prime source for news. According to the latest Pew Research survey, 40% compares with 35% for newspapers and, still, 70% for television.  The latter medium remains the leading source for news, all generations compounded. Even more interesting is the trend we can discern from the following: among Americans below 30, exactly the same proportion (59%) mention television and the Internet as their n°1 source for national and international news. All by itself, this shows how doomed newspapers are — as a medium, not necessarily as a news provider (as long as they are able to mutate).
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15.586 + job cuts. 2008 has been a terrible year for the journalistic profession in the United States. These job cuts in the newspaper industry (layoffs and buyouts), represent more than seven times the 2007 number of staff reductions (already a record high with 2185 people being axed), according to the blog papercuts. Altogether, the US Department of Labor estimates job losses in newspaper industry at 21,000 (editorial staff and others). And losses in the magazine industry are extra.
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30 big newspapers for sale. That is for the US market. Problem is, even at bargain basement prices, there are very few buyers. The Financial Times says newspaper valuations have gone from 8-10 times operating cash-flow a few years ago to 4-6 times now. And with ad revenue falling by 15% to 20% in 2008 and comparable declines in sight with –17% for 2009 and –7.5% for 2010 (as forecasted by Barclays Capital), the notion of positive cash-flow is fading away. No market will be spared: Deloitte is expecting a loss of 20% in ad revenue for UK newspapers. For many papers, says the report, staff reduction won’t be sufficient, and they will be forced to reduce print frequency.
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22% of operating costs. If the New York Times cut its operating expenses in half by abandoning print entirely, its online advertising revenue would cover only 22% of remaining expenses (based on Q3 2008). Even though we can hope for more stable online economy in the long run, this 22% number shows by how much such a big journalistic cathedral will have to shrink.
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1:10. For the worldwide newspaper industry, the 10-to-1 rule applies in two ways: in revenue terms, a Web reader is worth one tenth of a print customer; each extra dollar (or euro) of revenue on the Internet translates into 10 dollars (or euro) lost on paper advertising. This is verified worldwide. 2009 is likely to change these ratios for two reasons: first it seems that, even on the Internet, ad revenue growth is coming to a halt ; and as net ad dollars and euros migrate to search (more targeted, cheaper for brands, and controlled by Google), the revenue stream is likely to be affected negatively.
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91 years. That’s how old the Pulitzer Prize award is. In 2008, it took a major step by opening the competition to non-newspapers outlets. It will be interesting to see how pure players do. The most likely outcome is foreign news reporting will remain in the hands of the traditional newspapers, but two fields are likely to be affected:  politics and businesses in which pure players are thriving (and will hire some good pros laid off from print).
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#4 ranking. Drudge Report. The gossipy/ breaking news political website outranked the  New York Times during the Nov. 4th election night, according to Hitwise.  The three sites ahead of the Drudge Report are all TV related ones: #1: CNN.com ; #2: MSNBC.com : #3: FoxNew.com. Hitwise uses questionable metrics (market share), but still, it shows the power of specialized blogs such as The HuffingtonPost or The Politico. Those blogs are manned by 50-80 people with high journalistic standards while The Drudge Report is more like a two-persons outfit (read this interesting profile of Matt Drudge in New York Magazine).
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$260 a month. That’s how much the average US household is spending each month on digital services that did not exist a generation ago. They include: mobile phone, broadband access, cable or satellite television, personal video recording. This number comes from a survey by the Center for Digital Future, a department of the University of Southern California. Even more interesting is the amount of money spent by the poorest households: their monthly bill of digital services isn’t as low as one would imagine: $180. This suggests two thoughts: one, these services are no longer a luxury but have become as basic as a car; two, given this amount of money, hoping to squeeze a few dozens of dollars more per month for content services is unrealistic. Except for highly specialized premium services (almost never paid by the end-user), editorial on the Internet is very likely to remain free. European spending is lower, but catching up. — FF
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