The news just keeps getting worse for Heritage Media. First it was search advertising putting the pressure on display advertising online, and now we have a huge hit in newspaper revenues.
According to figures released by the Newspaper Association of America (noted by Alan Mutter) newspaper revenue in the United States declined $3 billion in the first half of 2008 to $18.8 billion, a 14% drop.
Online didn't provide a bright spot for the industry, dropping 2.3% in the second quarter, although for the half year was up 2.3% to nearly $1.6 billion.
The decline comes on several fronts. Print sales were down 16% in the second quarter after dropping 14.4% in the first quarter of 2008. Print classified advertising dropped a whopping 35.2% to $5 billion, broken down into drops of 36% for job ads, 35.5% for real estate, and 21.9% in automotive.
There's absolutely no way of spinning these figures positively: newspapers in their current form are heading towards extinction. The print advertising market, long the backbone of profitability of newspaper publishers, is collapsing as online takes control of the space. The decline in readership of the print editions is accelerating, and less readers will only quicken the decline in the advertising market. To use a cliche, newspapers are now facing a perfect storm, one that will see very few left at the end of it within the space of 3-5 years, where as previously I would have thought somewhere closer to 10 years. Game over.