There are no Wall Street analysts who believe that newspapers will recover from the ongoing financial crisis. Publishers have argued that housing, employment, and car markets were the cause of their declining revenue. When those industries recovered, they reasoned, so would the newspaper industry. Based on the third quarter results from large newspaper chains including The New York Times Company (NYT) and Gannett (GCI), it is almost certain that the internet has mortally wounded this business and that the websites set up by local papers are not pulling in enough revenue to offset what print versions are losing.

The Audit Bureau of Circulations released its numbers for newspapers today. For the six months ending in September most large dailies lost a significant portion of their subscribers compared to the same period a year ago. The biggest papers in Boston, Houston, Philadelphia, and Atlanta all dropped over 10%.

As the year wears on there is growing evidence that the magazine industry will not escape the fate of newspapers. Several of the largest weekly magazines, business publications, and the flagship properties at some of the big print companies are experiencing tremendous advertising page attrition which is, in many cases, accelerating.

According to ad page figures given to 24/7 Wall St. by media newsletter MIN, some of the largest publications at Hearst and Conde Nast are down significantly.

At Hearst, Cosmopolitan’s ad pages are off almost 11% through November. Redbook is down 10% for the same period. Good Housekeeping is only off 4%.

All of the big Conde Nast magazines are posting sharp advertising page drops. The New Yorker is down 24% through November. Vanity Fair is off 12% but its November issue lost 34% of its ad pages compared to the year before. Vogue dropped 7% but pages were down 32% for November compared to the same month in 2007. The Newhouse family, which owns Conde Nast, has been experiencing large losses at some of its newspapers, further compounding the trouble.

Business magazines and weekly news publications have been hit especially hard this year. The internet has put them at a distinct disadvantage. Their content relies to a large extent on timeliness. Magazines have little chance of competing with the internet because it takes days just for the printing and mailing.  This growing problem is forcing the owners to consider how much money the large business magazines lose on their print editions and whether their online products can make up for that.

Through the third week in October, BusinessWeek, owned by McGraw-Hill (MHP), has lost over 17% of its ad pages since last year. Forbes is down almost 16%. Fortune, owned by Time Warner (TWX) is up just over 2%. Online audience measurement firm Quantcast shows BusinessWeek.com with seven million unique visitors and Forbes with four million. That means they at least have an opportunity to do well bringing in large sums of internet ad dollars even as a recession diminishes some of the growth in that medium.

In the weekly news category the three large publications, Time, Newsweek (part of The Washington Post (WPO), and US News, have lost an average of 27% of their ad pages. US News, which is privately held, is going through a particularly brutal period with ad pages off 32% year-to-date. Quantcast estimates that USN has only 2.3 million visitors online, probably not enough to make up for the fall-off in the print product.

Magazine executives are likely to make the same case that newspaper management did last year. In a better environment, print revenue will come back. That view now appears naive. Magazines do have the advantage of having watched newspapers wait too long to move online. If they take advantage of the benefit of that history they may find themselves in relatively good shape.

Douglas A. McIntyre

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