Decline, Decline, Decline (Worldwide)

Is there a crisis of journalism? Are newspapers losing readers and revenues? Are professionals losing their jobs? Is the web killing print media? To find out, I analyzed numbers and trends, charts and reports.

According to the OECD report, The Evolution of News and the Internet, overall, newspapers in the Organization for Economic Cooperation and Development countries (OECD) are declining in three major fields: circulation, revenues and workforce.

If we look at daily newspaper circulation, we notice that it decreased by 2.7% in the OECD countries from 2000 to 2008 (figure on the left). The opposite is true, instead, in the so-called BIICS countries; that is, Brazil, India, Indonesia, China and South Africa – the emerging new world economies – where newspaper circulation increased by 35% in the eight-year span.

In all OECD countries, circulation is decreasing except in Ireland (+30%), Poland (+24%), Turkey (+20%) and Portugal (+10%).

We can get more detailed information about newspaper circulation in the United States from the Poynter Institute annual report, The State of the News Media.

According to the chart on the right, daily newspaper circulation in the USA has steadily decreased from 1990 to 2008, with a total circulation loss of 25.6% since 2000. According to the study, among the top 15daily newspapers in the States, only the Wall Street Journal managed a 0.6% increase in circulation compared to all other dailies since 2008 (from 2,011,999 to 2,024,269).

The Wall Street Journal has thus become the nation’s highest circulation daily, passing the USA Today, which instead decreased its circulation by 17.1% since 2008.

Readership decline in the United States is sharpest among young adults: in 1999, 42% of people aged between 18 and 24 reported reading a daily newspaper, while in 2009 the percentage decreased to 27%.

What are the reasons behind these declines? According to The State of the News Media 2010 report, readership decline can be explained by the “continued shift of audience … away from print to online as the preferred way of getting the news.”

Another reason is the decision of cutting circulation in more distant areas, in order to cut delivery costs. Readership has decreased also because of higher single-copy and subscription prices. Because of the overall economic recession, people with financial problems have decided to cut back on some kind of spending, with newspapers usually being one of the first.

Decline does not concern only newspaper circulation and readership, but also newspaper revenues. As we can see from the chart on the left developed by the OECD report, The Evolution of News and the Internet, advertising and classifieds play a huge role in newspaper profits, especially in such countries as the United States, Luxembourg and Canada; while in the Netherlands, Denmark and Japan copy sales still account for the majority of revenues.

The report, however, claims that “the reliance on advertising has been growing over the years for most OECD countries, increasing the vulnerability to the business cycle as advertising sales usually contract even more than circulation in times of downturn.”

This is especially true for the United States, where newspapers ad revenues “for print and online combined” fell 26% in 2009, as reported by The State of the News Media and as shown by the graph below.

Is online advertising going to save newspapers then? According to the Poynter Institute report, years ago, publishers thought that “as news audiences moved to the Web, newspaper publishers and advertisers would simply move with them.”

Things are not working out that way, though. As of today, “online accounts for only 10% of total ad revenue” and online revenues to newspapers are declining by “slightly more than 10%” in 2009 in the United States.

Why are online ads not profitable? A survey on online economics, cited by The State of the News Media, finds that “79% of online news consumers say they rarely if ever have clicked on an online ad.” This is why the report concludes that “online advertising by itself won’t soon and may never be sufficient to support a strong, comprehensive newsgathering operation.”

As we have seen, newspaper circulation, readership and ad revenue are all declining. Does this decline concern also the number of journalists who work for newspapers?

The OECD report actually notices that “the number of people employed in the newspaper industry grew strongly in OECD countries in the second half of the 20st century, and until the end of the 1990s.” Since then, the number began shrinking. The decline was not uniform in all OECD countries, as we can see from the table below (table 1).

Newspaper employment has declined especially in Norway (-53%), the Netherlands (-41%) and Germany (-25%). Many other OECD countries such as Italy, France and the United Kingdom have rather experienced a “stagnation of the number of employed journalists.”

The State of the News Media gives a better overlook on the employment situation in the United States. According to the report, “The American Society of News Editors census estimates 2,400 full-time professional newsroom jobs lost in 2007 and 5,900 in 2008.”

As we can see in the graph on the right, from 1978 to 2009, the number of people employed in newspaper newsroom constantly fluctuated over time, with peaks in 1989 (56,900 people) and 2000 (56,400).

As of 2009, the number of employed professionals in newspaper newsrooms shrank to 41,500.

The situation doesn’t seem rosy for newspapers at the moment.

Decline in circulation, readership, revenues and workforce affects the majority of OECD countries. Clearly, a new model for newspapers must be found quickly in order to stop this threatening recession.

The print journalism industry seems to be in crisis. Is it really so? What do journalists and professionals think?
Follow my blog to find out!