Newspapers Lose $18 Billion In 3-Year Period

by Erik Sass , May 13, 2009

Much attention has been focused on the decline of major American newspapers, and it's common knowledge that print advertising revenues have plunged over the last couple of years. But exactly how much money have newspapers lost in their print operations? An estimated $18.7 billion from 2006-2008.

Those calculations are based on annual and quarterly figures from the Newspaper Association of America. This figure is considerably higher than the $11.9 billion difference between total print revenues of $46.6 billion in 2006 and $34.7 billion in 2008, because it counts cumulative revenues lost in the long term, in addition to year-to-year declines.

newspaper rev losses
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To put $18.7 billion in perspective, it's more than the gross domestic product of Iceland, pegged at $17.55 billion by the International Monetary Fund in 2008. On the other hand, it's only about one-third of the value of Bernie Madoff's securities fraud, estimated at around $50 billion.

Many in the newspaper industry have counted on their online operations to salvage the bottom line, but that may be quixotic. During 2006 to 2008, total Internet revenues amounted to $8.9 billion -- less than half the losses on the print side. What's more, after anemic growth of $500 million from 2006-2007, Internet revenues actually declined in 2008, subtracting about $50 million.

advertising, newspapers

2 comments about "Newspapers Lose $18 Billion In 3-Year Period".

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Sonja Sherwood from Philadelphia Business Journal, May 14, 2009 at 1:16 p.m.
Am I looking at this correctly? It appears this graph is counting prior year's $ losses twice, and then thrice, to come up with the $18.7B number. If you lose $5B in year one and $10B in year two, you've lost $15B over two years, not $20B. The only graph that should be summed is 2008, since it (appears to) include all the losses from the prior years, and that comes to $11.9B.
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Adam Boyden from Conduit, May 15, 2009 at 11:39 a.m.

Erik: I liked your line, "Many in the newspaper industry have counted on their online operations to salvage the bottom line, but that may be quixotic." You're right, of course. It might be quixotic, but I think the newsrooms' (at least) are onto something. They are changing the very face of journalism. Traditionally, journalists only used topic matter experts to provide context for news story; the "people on the street" were only quoted to illustrate a story. Not anymore. Newsrooms engage viewers like never before, changing the very way they gather and disseminate news. The citizen journalist is on the rise. For example, CNN uses video and photos from people in the middle of a natural disasters. They very actively encourage this participation on air and are using online tools to facilitate that: easy to use upload gadgets for video and photo are available from their websites, toolbars and even mobile devices. Fox News for example has toolbars that enable viewers upload their photos and video for play on air. Perhaps these citizen journalists demonstrate something critical: although it resisted for a long time, now both print and television are now using online communication technologies such as blogs, toolbars, RSS feeds, and desktop alerts to share regular and breaking news. They have learned, like web sites, that you cannot wait for your audience to tune in.