Many people have read so much about the death of the newspaper industry that they might believe that online ad spending passed newspaper ad spending years ago. That is not so. It was actually this year when the historic event took place.
eMarketer reports that “The digital-marketing research firm says U.S. spending on online ads will hit $25.8 billion, surpassing the $22.8 billion spent on print ads in newspapers.”
There is not much to say about what has happened. Many believe newspapers will slowly disappear and, perhaps a decade from now, there will not be a economically viable large paper in the US.
That assumption about the future of newspapers may not be true at all. The New York Times reports that its gets 15% of its advertising from online marketers. That is not enough to offset high costs of its newsroom and printing. The portion of online revenue should improve, based on the current trend. The Times may also eventually decide that its news staff is too large or that newsprint has become an anachronism.
The newspaper industry has done three major things to address the threat of the internet. The first is the approach the Times has taken. Online and print will live side-by-side for now. The company will begin to charge people for online content. The Times has also begun to rely on blogs and social media to improve its audience. The formula may work enough to make the model viable for years.
Some publishers have given up. Large papers in Denver, Seattle, and Ann Arbor have been shuttered. More of that is likely to happen. Some newspaper companies do not have the balance sheets to support properties which need cash to keep them in business. Other firms believe that they have seen the future, and there is no place for the printed word.
The last potential solution is that papers will print on only a few days each week. Those will be the days when print advertising is traditionally the strongest, like Sunday. The rest of the week, people who want new will have to get it online. This approach has been used in Detroit. It has shown some promise, so far
Online ad revenue may have gotten the best of newspapers, but the struggles of the paper industry are not over. Innovation is not solely the property of content that lives online.
Douglas A. McIntyre
Top Gaining Stocks
Top Losing Stocks