June 20, 2007
By the Project for Excellence in Journalism and Rick Edmonds of The Poynter Institute.
Is the newspaper industry dying? Not now. On an average day, roughly 51 million people still buy a newspaper, and 124 million in all still read one.
The recording pre-tax profit margins in the high teens, and online editions are adding readers and advertising revenues at a healthy pace. When online and print readers are combined, the audience for what newspapers produce is higher than ever.
But the print newspaper is unquestionably ailing. Circulation is declining. Advertising is flat. As Warren Buffett said at his annual investor’s meeting in May 2006 newspapers appear to have entered a period of “protracted decline.”
The search is on for new business models, but success is not guaranteed. And while the fundamentals might reverse, there is no compelling case that they will.
Newspapers are focusing more on improving their journalism online. But it is not clear if the Web will ever make enough money to support journalism as we know it in print. The worry is that newspapers may be stuck with a traditional manufacturing cost structure that cannot be reduced or shifted fast enough.