Johnny, There’s No Paper
Johnny, There’s No Paper

Johnny, There’s No Paper

The rate of decline in print circulation at the nation’s newspapers has accelerated and industry figures released in the past week show another 7% decline compared with the previous year.  Of the top 25 newspapers in the United States, all posted declines in circulation except for the Wall Street Journal, which eked out a .6% gain.

Among the factors reflecting this decline is the reduction in “junk circulation.”  This represents free newspapers distributed at trade shows or in schools.  At the same time, many newspapers are increasing prices in an effort to wring more revenue from their core readers while doing away with cheap introductory offers to attract new readers.  The higher prices, naturally, cause some readers to drop the paper altogether.  Even giants like the USA Today have seen a circulation decline of 17.5% down to 1.9 million readers.  Some hotels have cut back on free newspapers delivered to rooms.

The current economy has a lot to do with the decline in circulation.  A lot of people are out of work or the folks still working are cutting expenses such as eliminating newspapers.  Meanwhile, the audience for newspaper Web sites continues to grow.  Sadly, what is in today’s newspaper was on the Internet yesterday.  Last year, total newspaper advertising revenue declined 16.6% to $37.8 billion dollars.  That is $7.5 billion less than the prior year.  Newspapers are reducing their print editions, laying off staff, or closing entirely as a result of the severe double whammy of economic recession and competition from the Web.

In October of 2009, the price of a daily newspaper in Detroit doubled from .50 cents to $1.00. Not too many years earlier, that same newspaper had been .25 cents a copy.  In December of 2011, the home delivery discount was eliminated and the cost of a six month subscription for a Detroit newspaper went to $90.00.  In 2009 also, home delivery of a Detroit newspaper was reduced to three days from seven days.  Daily circulation of the Detroit Free Press and the Detroit News fell by more than 50% between March 2008 and March 2011. Newspapers across the country have also been in the process of “slimming down.”  Newspapers that were 16 inches wide were common for years.  However, in an effort to cut costs newspapers were reduced to 12 inches wide.

Newspapers have not yet started to shut down in large numbers, but it is only a matter of time.  Over the next few decades half the world’s general papers may fold.  Jobs are already disappearing.  The Detroit experiment in reduced home delivery resulted in the loss of over 360 jobs.  Forecasters have noted recently that 1,400 daily newspapers could disappear over the next 5 years.  These newspapers may not entirely fade away but they will no longer be published on a daily basis.  The average age of a daily newspaper reader in the U.S. is between 56 and 60 years of age.  That population will shrink more rapidly than any other group over the next 10 to 15 years.  Seniors are the least attractive audience to the advertisers who support print advertising.

For the time being, printed newspapers can survive simply by cutting costs and raising subscription fees.  However, at some point, publishers will no longer be able to afford to deliver a product that people want to pay to read in print.  Circulation declines will accelerate.  A tipping point will be reached and the whole print model will fall apart.  Demographic trends indicate that it will certainly happen within the next 10 years.  Many publishers have already cut back on unpopular Saturday and Monday editions.  It may be a sign of the times that Barnes & Noble, which is struggling in today’s hard copy print market, is giving away a free black & white Nook reader to people who buy a one year subscription to the on-line New York Times.

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Written by
Donald Wittmer