Friday, July 8, 2011

Report: American Newspapers Still Troubled

News Industry roaring ahead in emerging platforms

From The

“Who killed the newspaper?” That was the question posed on the cover of The Economist in 2006. It was, perhaps, a little premature. But there is no doubt that newspapers in many parts of the world are having a hard time. In America, where they are in the deepest trouble, the person often blamed is Craig Newmark, the founder of Craigslist, a network of classified-advertising websites that is mostly free to use. Mr Newmark has been called a “newspaper killer” and “the exploder of journalism”, among other things.

The popularity of Craigslist, the ninth most popular website in America, has contributed to a sharp decline in newspapers’ classified-advertising revenue—a business where many newspapers have had comfortable local monopolies for decades. 

The internet-driven fall in classified-ad revenue is only one of the reasons for the decline of newspapers in America, which started decades ago. The advent of television news, and then cable television, lured readers and advertisers away. Then the internet appeared in the 1990s. A new generation of readers grew up getting their news from television and the web, now the two leading news sources in America (the web overtook newspapers in 2010 and is already the most popular source among the under-30s).

These technological shifts hit American newspapers particularly hard because of their heavy reliance on advertising. According to the OECD, a club of developed countries, in 2008 America’s newspapers collectively relied on advertising for 87% of their total revenue, more than any other country surveyed. The 2008-09 recession made things worse. Between 2007 and 2009 newspaper revenues in France fell by 4%, in Germany by 10% and in Britain by 21%. In America they plummeted by 30%. On top of that, a series of mergers and acquisitions in the American newspaper business left many companies saddled with huge debts and pushed several into bankruptcy.

The health of newspapers is particularly important because they tend to set the agenda for other news media and employ the most journalists. In America, for example, the national television networks had around 500 journalists on their staff in 2009, compared with more than 40,000 for daily newspapers (down from 56,000 in 2001). But it would be wrong to conclude from the woes of American newspapers that newspapers and news are in crisis everywhere.

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