Ad Price Increases or New Markets? The Newspaper industry is headed for a blind curve, says Felicity Barringer, writer for the New York Times in an article released on January 29th. She
goes on to point out that the early signs in January reflect a lingering weakness in many markets
John Sturm, president of the Newspaper Association of America, said that there had been welcome
surprises in the fourth quarter, including unexpected auto company advertising. But, he said, one of his colleagues wondered ruefully if that spending was "the storm before the calm."
Fueled by a
slowdown in dot-com and airline advertising, the Chicago Tribune, The Los Angeles Times, Newsday and eight other newspapers, said that compared with the similar period in 1999, retail advertising was
flat while classified dipped about 3% and national fell 8%.
At Knight Ridder, fourth-quarter retail advertising revenue dropped 0.2%, national revenues rose 7.5%, and classified revenues rose 1.6%
compared with the same period in 1999. In December, all three categories showed declines. At The Wall Street Journal, advertising volume fell 9% in the fourth quarter and 24% in December.
Ad rate
increases are often newspapers' response to a slowdown in advertising volume. Executives from both Knight Ridder and the Tribune Company said that the single-digit advertising revenue growth projected
for 2001 would be driven largely by rate increases. But, Amy Gruberg of DreamWorks SKG said, "increases should be based on merit and not just expenses." If newspaper circulation is generally
declining, Ms. Gruberg asks, why should they pay more?
In a related speech by Earl J. Wilkinson, Executive Director, INMA in March of 2000, he presented newspaper statistics and readership
demographics, and noted that change in branded product and recognition of new target markets would be a likely business model for improving newspaper revenue.
Some interesting data and
demographics Wilkinson discussed were:
- 1964 to 1999, average weekday readership of newspapers in the United States declined from 81% of the population to 57%
- Circulation of daily
newspapers in the United States dropped 10% in the 1990s and 11.3% from its 1984 peak to approximately 56 million last year.
- In the last 50 years, circulation is up 4%, while the population has
grown 81%.
- The number of newspapers in the past half century is down 16%, and 7.5% in the 1990s to under 1,500.
- The median age is projected by the Census Bureau to rise only a few years
in the next half century, from 35.8 today to 37.5 in 2010, 38.5 in 2025, and 38.8 in 2050.
- The real demographic explosion in the next half century is projected to produce a tripling of the
Hispanic population, and a 350% increase in the Asian population.
- As defined by the U.S. Census Bureau, whites today represent 71% of the population, while Hispanics represent 12%. By 2050,
whites will represent 53% of the populati