Newspaper Circulation Plunges

Posted on November 7, 2007
Filed Under Interesting Stuff |

Overall, average daily circulation for 770 newspapers was 2.8 percent lower in the six-month period ending Sept. 30 than in the comparable period last year, the Audit Bureau of Circulations reported. Circulation for 619 Sunday papers fell by 3.4 percent.

This is nothing but bad news for newspapers. Their print circulation is plummeting with no bottom in sight and their online efforts are mismatched to their business structure, which is capital intensive.

Only having an outsider’s view of the industry, I can only speculate but it does appear that there is a basic structure problem in print operations, online, “writing operations”, and advertising. They have tried breaking up these companies into parts and selling off the discrete operations. Printing and distribution are not core functions but despite breaking the companies up into parts the impact on the financials has been incremental.

The online businesses developing under newspaper brands strike me as being constrained in a number of ways, not the least of which is that they are tied to a newspaper brand. Extending depth (time spent) as well as reach will only get them so far, the Times may well be right that it will take decades to get them to the point that they, on their own, eclipse print revenue. The integration of online and print newsgathering isn’t the solution.

The biggest problem that these companies have is that their advertising model is obsolete. Newspaper advertising, even online, does not narrowly target and worse, it does not help me because it’s not interactive. In the online side of the business, aggregators will continue to eat away at newspaper’s numbers and this reflects an inability of newspapers to adjust their delivery model in response to changing behaviors.

Despite knowing all of this the NYTimes has failed to deliver on the business modernization that Sulzberger promised back in 2005. Indeed, instead of doing, as Nisenholtz referred to as “the community stuff” the Time has instead done stupid things like TimesSelect.

This quote should be on the Sulzberger’s business card to instill a sense of humility about how badly he has mismanaged that American institution.

“Internet people are frontierspeople, [behind them] are the barbarians like me — the shopkeeper. We’re their worst nightmare, but we’re coming.”

Ironically, the NYTimes story linked above misreports their own circulation drop, stating it as a 3.5% drop when in fact the ABC numbers are 4.51% on weekdays and 7.6% on Sundays. Maybe the first step in their recovery should be accurate reporting.

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