Tuesday, October 27, 2009

The slow and painful death of newspapers

By Ian Connerty, guest columnist

In the six months ending Sept 30 2009 circulation of daily newspapers in the U.S. fell another 10% compared to one year ago. This comes on top of a 5% drop last year.

The biggest losers were the Dallas Morning News, the San Francisco Chronicle and the Newark Star Ledger which all had declines in paid circulation of more than 20% in just six months.

The Los Angeles Times dropped 11% and the Chicago Tribune was down 9 percent. Even the New York Times lost 7% of its readers. The only US daily with a slight increase was the Wall Street Journal which was up by 0.6%.

Canadian media is also feeling the pinch. Recently we witnessed the sad demise of the now bankrupt $4 Billion CanWest newspaper and TV chain and the closure of local affiliate TV stations.

This loss of readers and viewers is a problem for the mass media because advertisers look at paid circulation and viewer numbers to decide if, and how much they will spend with these media outlets over the next six months.

As a result of these reduced numbers, advertising revenues will now be down for most U.S. newspapers over the next six months and they will have to lay off more staff, further reducing the quality of their product.

And then they will lose more readers, and then they will lose more advertisers, in an endless cycle.

There is no end in sight to the bleeding.

Sell your media stocks now, if you still own any. Take your loses now, because the future will be more of the same.

This problem for the media is not just as sign of the global recession that is hitting newspapers and network TV hard, it’s because of the new competition – free news and commentary on the internet that has become a daily experience for former subscribers.

As for future customers - young people. They don’t even read newspapers – never have. They grew up on TV “Info-tainment news” and have now graduated to internet chat rooms.

The future is here on the Internet on blogs like this, and you are the proof that they work.

Informed commentary has been dropped by many mass media outlets in order to save money in their downward spiral and that is what the Internet is all about, as well as some real news, if you know where to find it.