Taking the News and the Paper Out of Newspapers

By The Myers Report Archives
Cover image for  article: Taking the News and the Paper Out of Newspapers

What's the future for local newspapers? Our 2010-2020 Newspaper Advertising Spending Report is published below and is available to subscribers at the Jack Myers Media Business Report Economic Data website The long-term economics of most printed daily newspapers just don't work anymore. In 2000, newspaper advertising revenues were $48.4 billion. Newspapers will generate only $28 billion in ad revenues this year. By 2020, I'm forecasting that traditional print newspaper ad revenues will decline to 15 billion dollars… and that less than half of today's daily newspapers will no longer be around.

Jack Myers Media Business Report
Newspaper Advertising Investments/Forecast
Traditional and Digital Ad Spending

SOURCE: Jack Myers Media Business Report Media & Marketing Investment Forecast December 2010
Source details available here.
*Jack Myers Media Business Report parent Media Advisory Group is an investor in HeresYourNeighborhood and The Echo System.

Many of you most likely still read a daily newspaper. But if you're under 35, it's considerably less likely that you regularly read a daily newspaper in print form. And many under 18 will never hold a newspaper in their hands on a regular daily or even weekly basis. Fewer than 20 percent of print newspaper readers today are under the age of 35 and outside of New York and major cities that number shrinks dramatically. Thousands of mobile apps and websites are delivering news for free. In just the past few weeks, Rupert Murdoch launched The Daily, the first digital news publication created specifically for the iPad; Arianna Huffington sold The Huffington Post to AOL for $315 million; and Barry Diller is increasing the investment of his company – IAC --in Tina Brown's DailyBeast.com.  Apps such as Flipboard are changing the use, perception and economics of content creation, aggregation and user access.

The economic return-on-investment for these aggressive digital enterprises remains uncertain. But it's becoming more and more apparent to economists and even to the most conservative of newspaper executives that the best hope – the only hope – for daily newspaper publishers is to transform as quickly as they can to digital platforms and to reduce paper and editorial costs by publishing only once, twice or three times weekly.

And newspapers can no longer afford to be just about the news. Their growth and popularity depends on developing the best websites and mobile apps for local sports and entertainment coverage, arts and education, retail and real estate coverage, style and local fashion, political commentary, and of course cartoons and the comics.

Newspapers need to produce more video content and, most importantly, they need to be the very best at building person-to-person content, social media connections and commerce in their communities.

In the past two years I've met with the senior executives of many newspaper companies and they all say they're investing aggressively in digital. In my opinion, it's still too little content and too narrow a vision. But it's not too late. The printed newspaper is to newspapers what dial-up revenues are to AOL. They provide the cash that enables acquisitions and investments in the future – as long as they don't wait until declining subscriber and ad revenues are an albatross that drags them into the abyss. I expect a surge of investment activity in the next 36 months as newspaper companies look for the next Huffington Post, acquire companies like Blip.tv, Flipboard, Yelp, Foursquare, Moviefone, Open Table, Zagat, AmericanTowns.com, hyper-local start-ups like HeresYourNeighborhood.com* and group commerce offerings such as TheEchoSystem* .

The industry's survival is dependent on taking the news and the paper out of newspapers.

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