The downturn in the newspaper industry is getting worse. Come to think of it, why would it spring back? They are still run by the PC editorial elite, not managers. Except for News Corp. and Gannett, which are run by real executives.
Here are some stats collected by the Wall Street Journal on the eve of their premium buyout by News Corp.
Last fall, newspaper executives and analysts were caught by surprise by the severity of a slump that took hold last summer. Since the beginning of this year, the rate of decline in advertising revenue has accelerated. Total print and online ad revenue was down 4.8% to $10.6 billion in the first quarter from a year earlier, according to the Newspaper Association of America, compared with its full-year decline in 2006 of 0.3%. Actually they should be unscrewing the Cooks sparkling wine for that.
• The Bad News: The rate of decline in newspaper advertising revenue has accelerated since the beginning of the year.
• The Background: Competition from the Internet and other media has transformed the market. In addition, real-estate classifieds have plunged along with the property market.
• What’s Next: The decline, which has sent newspaper stocks into a clockwise spin down the toilet, has prompted restructuring and consolidation, and has affected Dow Jones’s talks with News Corp. and the auction of Tribune Co.
Publishers have reported sharply lower ad revenue for April and May. The depth of the downturn is expected to become clearer as many companies report second-quarter earnings in coming days. Gannett Co. plans to report later today, and Dow Jones, publisher of The Wall Street Journal, and McClatchy Co. tomorrow.
In the first quarter, revenue for every major ad category — classified, national and retail advertising — was down. The sharpest declines were for classifieds, where spending dropped 13.2% — not so much a result of competition from the Web as of economic woes affecting certain categories of advertisers. Real-estate classifieds, until recently a bright spot for the industry, have plunged along with the property market. Auto and employment classifieds are also sinking. Financial-news outlets such as the Journal are being hurt by a slump in technology advertising.
“Right now, you’ve got a perfect storm,” says Edward Atorino, an analyst with financial broker Benchmark Co. He predicts total ad revenue will fall 4.3% this year. The decline will be one of the steepest in history. See what I mean, a .3% drop will be looked at with fond memories.
Yet, the editorial executives continue to court Democrats, and denounce American corporations and have no clue how to manage a sandwich shop, let alone an expensive newspaper.