Red Ink: Newspaper Revs Drop 9.7%
If the first quarter brought good news for newspapers, it was only relative to previous quarters, as the industry posted yet another (but smaller) decline in overall ad revenues. Combined print and online ad revenues fell 9.7% to just under $6 billion in the first quarter of 2010, down from just over $6.6 billion in the first quarter of 2009, according to the Newspaper Association of America.
The 1Q drop was due entirely to an 11.4% decline in print ad revenues, which fell from $5.92 billion to $5.25 billion. Online ad revenues increased 4.9% from $696 million to $730 million -- a welcome contribution, but still too small to offset the overall drop on the print side.
This was the first year-over-year increase in newspapers' online ad revenues since the first quarter of 2008, following seven straight quarters of declines.
As in previous quarters, in percentage terms declines were led by classified advertising, which fell 14.4% to $1.25 billion, while national fell 8.3% to $1.04 billion and retail slid 11.2% to $2.96 billion.
Within classifieds, automotive fell 16% to $280 million, real estate tumbled 27% to $245 million, and recruitment dropped 23% to $159 million; other classified revenues edged down 3% to $569 million.
Although it's hard to put a happy face on an almost 10% drop, the first-quarter decline is significantly smaller than previous quarters, holding out hope that the precipitous drop in newspaper ad revenues is finally nearing its bottom.
Beginning in the second quarter of 2006, newspaper print ad revenues have suffered 16 sequential, year-over-year quarterly declines, including drops of 0.31%, 2.6%, and 3.7%, in 2006; 6.4%, 10.2%, 9%, and 11.6% in 2007; 14.4%, 16.1%, 19.3%, and 20.6% in 2008; and 29.7%, 30.2%, 29%, and 25.6% in 2009.
In dollar terms, the loss of $676 million in print revenues between the first quarter of 2009 and the first quarter of 2010 is the smallest loss since the first quarter of 2007, when newspaper print revenues declined $670 million.