Fighting For Air: Newspaper Declines Flatten Seasonal Cycle
For decades, newspaper ad revenues have followed a seasonal cycle more or less like clockwork. The first quarter was the smallest in terms of ad revenue, followed by a bigger second quarter, a not-quite-so-big third quarter, and then a huge fourth quarter. But now this characteristic quarterly progression, which newspapers shared in common with other traditional media, has been flattened by the unprecedented decline of the medium.
The quarter-to-quarter changes, which once resembled happily ascending peaks in a mountain range, now look more like a ramp -- pointing down.
The basic down-up-down-up pattern held true for almost three decades, beginning in 1981.
Typically, in percentage terms, the second quarter brought a double-digit increase over the first quarter, ranging from 10% to 20% --followed by a modest step down in the third quarter, with declines ranging from 2% to 5% compared to the second quarter. The fourth quarter usually finished with a bang, increasing anywhere from 10% to 25% over the third quarter. Fourth-quarter revenues were usually 20%-35% higher than the first quarter.
Of course, all these figures were subject to variations based on the health of the economy. Weak years might see smaller increases in the second and fourth quarters and bigger drops in the third quarter, with the opposite true in strong years. But even during the worst economic years, the basic pattern still showed through.
The pattern was finally broken in the last two years, when the quarter-to-quarter dynamic reflected the sudden sharp drop in the medium's fortunes.
In 2008, the second quarter -- which historically brought an increase of at least 10% over the first quarter -- was just 4% higher. Then the third quarter, which typically declined 2% to 5% from the second quarter, fell 7%, marking the first time in 27 years that the third-quarter revenues were lower than the first quarter's. Finally, the fourth quarter of 2008 increased an anemic 13% over the weak third quarter, and just 9% over the first quarter.
In 2009, the trend is becoming even clearer.
The second quarter brought a 3% increase over the first, followed by a 6% drop in the third -- making 2009 the second year in a row in which the third quarter was lower than the first. Although the fourth-quarter figures are still out, the trend doesn't bode well.