Tony Harris sent me a link to this story in the New York Times which says that this year is shaping up to be the worst on record for newspaper advertising revenue.
I’ve been predicting a steady decline in advertising revenue for years (The Future Of Newspapers, State of the News Print Media in Australia 2007, Aussie Newspapers in decline and denial ) as people move online to get their news. The newspapers report people are moving online to their sites, but unfortunately they don’t make as much money from online advertising as they do from print, because online they have competition.
So what happens when revenue is in decline? They have to sack people and stop investing. The rot sets in.
A couple of the big metro newspapers in Australia seem to be holding steady but I suspect that’s got more to do with funny statistics more than anything substantial in the trending. They will inevitably fall prey to the same forces bringing down the newspapers in the US.
This is a good example of where shareholder activism (as Stephen Mayne was talking about on the show last week) is needed. Why aren’t the shareholders of Fairfax and News creating more of a shitstorm about what those companies are doing to make sure they don’t go down the tubes over the next decade? All I ever heard from Fairfax’s management is “things are great, we’ll be around forever” which just shows me that they are either in denial or just lying their asses off, hoping they’ll get out before the whole facade crumbles around them.