Newspapers: the end game

Newspapers: the end game

It seems that US newspapers are on borrowed time.

According to the Financial Times, the Council of Economic Advisers have reported that the press is "America's fastest-shrinking industry", measured by jobs lost. Furthermore, the Newspaper Association of America has shown that advertising sales have halved since 2000. They are now at 1984 level.

Bloomberg reports that a study by the Pew Research Centre has found that newspapers lost $10 in print advertising revenue last year for every $1 they gained online and that newspaper revenues declined more sharply last year than in 2010 when publishers lost $7 in print advertising for every $1 generated from online outlets. The Guardian tells us that Google now has greater revenues than the entire US newspaper industry.

One issue for newspapers is that they are losing grounds to tech intermediaries like Google, Facebook, Amazon and Apple with smart phones, tablet computers and social networks bringing people back to traditional print and broadcast news outlets.

The problem for newspapers is that the firms behind those technologies, especially Google and Facebook, may be better poised to make money from news stories than the companies that gather the information because while they distribute the news, they are more likely to steal the advertising dollars from mainstream media. For the papers, the business model is not sustainable.

Photo source NS Newsflash

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