Want to know why the newspaper business has collapsed? Look at this chart fromMarc Cenedella, CEO of TheLadders.com.
He shows ad revenue from help wanted classifieds dropping 92% in last 10 years, hitting $723 million last year, down from $8.7 billion in 2000. Once that easy money left the newspaper industry it was a lot harder to earn as much profit.
Cendella says it didn't have to be this way: "Newspaper executives knew what had to be done to compete successfully in the future but were afraid to upset the people responsible for the past. It was a lack of courage, not a lack of clarity."
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COMMENTARY: The demise of the newspaper industry is due to advances in technology. The shift from print to digital is the main culprit. Print media is now moving online or on mobile apps for viewing on smartphones like the iPhone and tablets like the iPad. This shift in technology has affected many industries, including film, photography, newspapers, magazines and books. It seems that a day doesn't go that a major newspaper doesn't announce layoffs or closes down. Printed books will probably be obsolete in about five years. Borders recently filed for bankruptcy.
The inevitable shift to digital finally came in 2010, as more Americans got their daily news from online sources other than print, according to the Biannual News Consumption Survey from the Pew Research Center for the People & the Press. The findings were released this week as part of Pew's annual overview of the news media.
Specifically, Pew found that the proportion of U.S. adults who said they got their news online the day before increased from 29% in 2008 to 34% in 2010. The proportion that cited print newspapers as the source of their recent news fell from 34% in 2008 to 31% in 2010.
Online still trailed broadcast and cable TV as a news source, which still enjoys the broadest reach. Indeed, the proportion that said they got their recent news from these sources actually increased slightly to 58%.
Likewise, the Internet came out ahead of print in terms of time spent with news sources, with an average 13 minutes per day, according to Pew. That stat beats print newspapers at 10 minutes, but trails TV at 19 minutes and radio at 15 minutes.
This good news for broadcast and cable TV was tempered somewhat by a more pronounced shift in news consumption habits among younger adults. Pew found that the Internet is now the No. 1 news source for the 18-29 cohort, with 65% saying they get most of their news online, compared to 52% for TV and just 21% for newspapers.
By contrast, TV still dominated in the 30-49 cohort, with 63% citing TV news as their top news source compared to 48% for the Internet.
It's worth noting that online news consumption is still dominated by traditional news sources -- including Web sites maintained by newspapers, which many publishers see as the key to future success.
Conversely, Pew noted that online advertising has not proved nearly as lucrative as print for newspaper publishers, raising questions about their ability to maintain both profitability and large news-gathering organizations.
Pew also noted the rise of online-only news operations, such as The Huffington Post, which now hold seven of the top 25 spots for online news consumption. However, five of these seven generate most of their traffic by aggregating traditional media.
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For a detailed discussion of the U.S. newspaper industry and up-to-date list of U.S. newspapers that have gone out of business or on the verge, check out Newspaper Death Watch.
Courtesy of an article dated March 14, 2011 appearing in SAI Business Insider and an article dated March 14, 2011 appearing in MediaPost Publications Media Daily News
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