Commentary

New NAA Chief Has Tough Row Ahead

Of all the media industry jobs you could have right now, the one David Chavern is about to take has to be one of the most daunting. On Thursday, the Newspaper Association of America announced that Chavern has been appointed president and CEO of the industry organization, replacing Caroline Little, who announced her plan to retire earlier this year after four years at the helm.

Chavern previously served as president of the U.S. Chamber of Commerce’s Center for Advanced Technology & Innovation, so he has ample experience herding occasionally fractious or obstinate business types toward a larger goal for the greater good.

At the same time, as the NAA points out, he’s an outside to the industry who’s also tech savvy (he launched and led the CoC’s Center for Advanced Technology), which should give him a fresh perspective and valuable insight into how newspapers can tap into emerging technologies to grow.

Little and Chavern both deserve major kudos for taking on such a tough job.

There’s no getting around the fact that the newspaper industry, following a decade-long decline, is in a bad way. From 2005 to 2013 (the most recent year for which NAA data are available) total revenues including advertising and circulation declined by a third from $56.1 billion to $37.6 billion. Ad revenues took the biggest hit, tumbling from $49.4 billion to $23.6 billion for a 52% drop over the same period. 

Although the NAA still hasn’t released data for 2014, it’s safe to assume neither last year nor this brought a substantial change in the industry’s fortunes. A separate estimate from Kantar has newspaper ad revenue down 10% in 2014, and ZenithOptimedia predicts global newspaper ad spend will decline at a rate of 2% a year through 2017.

A number of turnaround strategies have so far mostly failed to pan out. Digital advertising revenue, once touted as the savior of the newspaper industry, is lackluster at best: one again referring to the 2013 figures, digital ad revenues came to $3.42 billion, or about 14.5% of total ad revenues.

That’s up 68% from $2.03 billion in 2005 -- but over the same period the digital advertising business overall increased from $12.5 billion to $42.8 billion, for a 340% expansion. At the same time newspapers’ digital growth has slowed markedly, decelerating from a 10.9% annual increase in 2010 to 6.8% in 2011, 3.7% in 2012, and 1.5% in 2013.

Digital subscriptions, another hopeful strategy, have also fallen flat, judging by results from major publishers; even where successful, it appears digital subs may prove to be a one-time bump to revenues, with limited growth prospects afterwards.

On that note, the New York Times Co., with the most successful digital subscription model (having recently surpassed a million paying digital-only subscribers) revealed that total circulation revenues increased a paltry 0.9% in the second quarter of the year, to $211.7 million.

That’s actually down slightly from $215.4 million in the second quarter of 2011, the first full quarter following the company’s introduction of digital subs in March of that year. Meanwhile Gannett, the nation’s largest newspaper publisher, which implemented digital subs in 2012, saw circ revenues fall 3.5% to $265.9 million in the second quarter.

Newspapers are still in trouble, and the way out isn’t clear. The incoming boss of the NAA has got his work cut out for him.

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