• by Erik Sass  @eriksass1, December 24, 2007

Two of the nation's largest newspapers plan to raise their newsstand prices in 2008. The Washington Post will be raised from $0.35 to $0.50 on Dec. 31, and the Chicago Tribune will increase from $0.50 to $0.75 at the same time. The price increases--which follow similar hikes at The New York Times and The Wall Street Journal--are a symptom of the broader problems afflicting the newspaper industry, including steep declines in print advertising and circulation revenues.

Although they may help offset losses in the near term, analysts say the newsstand price increases are a band-aid that fails to address the causes of the underlying secular downturn.

In the first three quarters of 2007, the Washington Post Company saw total revenue at its newspaper division decline 8% to $657.2 million, compared to the same period in 2006, offsetting strong performances by the company's education and cable TV businesses.

The situation in print advertising is the most alarming, with ad revenue at the flagship paper down 14% to $366.6 million in the first three quarters, due largely to precipitous drops in classified ads. Its daily and Sunday circulation revenues both declined 3.5%. According to the Audit Bureau of Circulations, during the six-month period from March-September 2007, Sunday circulation fell 9% and daily circulation 3%, compared to the same period in 2006--to 894,428 and 635,087, respectively.

The Chicago Tribune is in the same boat, suffering substantial declines in print ad revenue, driven by big drops in classified ad categories. In the third quarter, the Tribune Company's total revenues slipped 4% to $1.28 billion, due largely to a 7% decrease in revenues at its publishing division, compared to the same period in 2006. This, in turn, was due to a 9% drop in advertising revenues.

Circulation revenues fell 5% in the third quarter. According to ABC, Sunday circulation for the flagship Chicago Tribune fell 2% to 917,868, as weekday circulation fell 3% to 559,404.