Polishing the Brass on the Titanic (Continued)

On Thursday, I wrote about the downward plunge of newspaper circulation in the U.S. based on the recent numbers released by the Audit Bureau of Circulations. The average decline in circulation for daily weekday papers was 10.6 percent (or about 30 million copies), based on numbers from the past six months compared to the same six months in 2008.

But, before we freak out any more about the end of American newspapers as a whole, Daniel Gross of Slate has a word of advice: Chillax. (Really, that's exactly what he says in the article.)

Here's why he thinks things aren't as bad as they might seem:

"First of all, there's nothing ipso facto shocking about a decline in patronage of 10 percent in six months. Many political blogs and cable news shows have seen their audiences fall by much more than 10 percent since the feverish fall of 2008. And advertising at plenty of online publications has fallen by a similar amount. In case anybody has forgotten, we've had a deep, long recession, a huge spike in unemployment, and a credit crunch. Consumers have cut back sharply on all sorts of expenditures....

...Many other components of consumer discretionary spending—hotels, restaurants, air travel—have fallen off significantly. Do we draw a line from trends over the last few years and declare that in 15 years there will be only a handful of hotels?"

Certainly the election last fall drove circulation numbers higher than they would have been, resulting in a more dramatic falloff in the time since, but that doesn't change the fact that the decline exists. And if it continues to slide, even at a slower pace, that's bad news, right?

Wrong, says Gross, because falling circulation does not necessarily mean falling revenue. Many papers have increased prices at the newsstand and for home delivery. So, while the New York Times has seen a 7.3 percent drop in circulation, they have also announced that revenues are actually UP 6.7 percent in the third quarter. At the same time, income from circulation surpassed income from advertisements for the first time, ever.

Of course the question is whether the higher costs can balance out the losses that are being felt in advertising (traditionally the way newspapers made their money), while at the same time not driving away so many customers that even higher prices are forced upon those that remain. It does not sound like a good long-term plan, but at least there might be hope.

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Polishing the Brass on the Titanic

The Audit Bureau of Circulation, which calculates newspaper circulation numbers in the United States, has released the totals for the six-month period from March-September. Let's just say they aren't very pretty.

When compared to the circulation numbers from March-September of 2008, only one of the top 25 newspapers in the United States has seen an increase an increase in circulation. That paper, the Wall Street Journal, is up a whopping 0.6 percent. As for the other 24, its not only that they are down, but how badly they are down. Here's a sampling:

USA Today: -17.2%
New York Times: -7.3%
Washington Post: -6.4%
New York Post: -18.8%
Houston Chronicle: -14.2%
Boston Globe: -18.5%
Dallas Morning News: -22.2%
San Francisco Chronicle: -25.9%

These aren't papers that no one cares about; these are some of the most important papers in the country. And some of them have lost one out of every five or six readers in the span of a year. Megan McArdle thinks this is more than just a bad stretch:

"I think we're witnessing the end of the newspaper business, full stop, not the end of the newspaper business as we know it. The economics just aren't there. At some point, industries enter a death spiral: too few consumers raises their average costs, meaning they eventually have to pass price increases onto their customers. That drives more customers away. Rinse and repeat . . ."

McArdle, who stood in front of me and about 40 other enterprising young journalists back in June and tried to assure us there would be some kind of future in the business, is not the only one who says newspapers are circling the drain.

Paul Gillin, of Newspaper Death Watch, says that newspaper circulation today is lower than it was in 1940, the first year for which data on circulation is available. Back then, 31 percent of people read a newspaper. Today, it's less than 13 percent. Even worse, in 1940 there were 118 newspapers published for every 100 households in the United States. Ten years ago, there were 53 per 100 households. Today, that total is less than 33 per 100 households.

On the plus side, the ABC also released the top 10 circulation gainers during the past year. Then again, I think it's a top 10 list because there weren't enough papers with positive numbers to make a full top 25.

Maybe it's time I read the writing on the wall and gave up on this kind of career.

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