THE BLOG

Is This the Last Newspaper Stand?

Apr 28, 2008 | Updated May 25, 2011

Ever since the Huffington Post launched, three years ago in a few weeks, May 9th to be precise if you wish to send Arianna flowers, we have seen the continued strength and rise of online media, and the continued free fall of newspaper circulation.

Every six months, the large city newspapers are reporting circulation declines of 3% to 8% and the cumulative effect of those declines is stark, and foretells the coming end of the newspaper era.

It is my opinion that substantial fixed costs, newspaper plants, delivery trucks, combined with rising energy costs, and lower consumer spending, meaning less advertising will all transpire to cause the closing of at least one major newspaper in the next six to nine months, potentially more.

Look at the tale of three major city dailies:

12. San Francisco Chronicle, 370,345, down 4.2 percent

13. Dallas Morning News, 368,313, down 10.6 percent
14. Boston Globe, 350,605, down 8.3 percent

These are six-month numbers which look very much like the last six-month numbers and the ones before that are pretty much identical as well.

In the face of these dramatic declines, a few more issues become stark realities. The first is the relationship between these city newspapers and the communities they serve.

The New York Times, for example, with total circulation of just over a million people, and not all of those are in New York City, many are in the greater New England area, Washington, even Florida and California. How well does it now represent a city of 9 million and a metroplex of, some estimate, 12 million people?

The Boston Globe, which even just 24 months ago, was over 500,000 circulation, now has dropped all the way to 350,000 readers. The 2 million people in the Boston area are not reading using the Globe like they were a decade ago.

It also becomes hard to see how The Globe survives the next year; with enormous fixed costs, a huge workforce, many with union contracts, a large printing press, some very expensive journalists and a fleet of delivery trucks. They should have dropped their advertising rates by 25% over the past two years, but instead they have been raising rates, rapidly, to cover the declining revenue, it is a recipe for death, not success.

There is nothing short of a dramatic re-invention that will prevent the numbers six months from now showing significant declines and six months after that. I have often thought that if I was a newspaper person, I would be looking a large dominant weekly, and forego the daily paper.

When you combine those realities with the reality of a decline in consumer spending, which will equal a decline in advertising spend by retailers, you see the writing is on the wall.

Smart companies will realize they deliver news, not newspapers and continue to transition online. But growth online has greatly reduced CPMs, it is a different business, some will survive, many will not, but either way, six months from now, one of the newspapers who reported another dramatic decline in readers today, might not be around to share their bad news.