Recent Drop in Newspaper Sales Threatens Industry

Economics 101 tells us that if a similar product can be substituted for a more expensive product the general public will likely pick the less expensive product. The Audit Bureau of Circulations just released their recent newspaper sales statistics. Nationwide newspaper circulations are down by about 10 1/2%. Millions and millions of Americans are increasingly turning towards alternative news sources. For example, the online news market continues to threaten big paper subscriptions.This latest 10.5% decline (from April to September) is by far more severe than anything the industry has seen in the previous six months.

Newspaper corporations are trying to offset the decline in subscriptions by selling online ad space. However, ad revenue is not producing enough to sustain current operations. All across the Nation newspaper companies are cutting staff dramatically.

A myriad of newspapers have already reduced publications to only a couple days a week. Also, geographical locations that are on the edge of large metropolitan cities have seen a sharp decline in news coverage.

The declining numbers hold true all across the big news players. Names like the Wall Street Journal, USA Today, the New York Times, and the Washington Post all reported sharp declines in circulation subscriptions. Some of the companies declined over double-digit! It seems that a combination of a declining economy and the advent of the Internet is making the newspaper industry a not so safe place to weather the recession.

The decline in circulations is not just limited to the big news publishers. Many small town news companies are drastically taking pay cuts and laying staff off. In the Bay Area the San Francisco Chronicle‘s subscription percentage fell over 26%. Advertisers have seen many of the news players increase online ad costs significantly.

Online news sources continue to increase viewing numbers. A recent survey by Nielsen suggests that 73 million unique visitors are visiting online news websites per month

In many situations the rift between internet news sites and newspaper circulations is pitting original content makers versus internet news aggregators. There is a general consensus that recent technological advances are great for news aggregators, but not so great for original content creators.

Newspaper publications are finding it more and more difficult to keep up with the aggregate news sites; who can immediately send a news story to thousands and thousands of websites. Often times, the original content creator will only receive recognition from a small handful of original viewers.

The news about internet news readers increasing is great for artists and publishers who were previously barred from entering the industry. Previous market entrance costs are dramatically declining as existing newspaper publications begin to lose their grip on readership.

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