Newspapers Continue Losing Ground to Digital Formats

(CN) – As Americans continue to shift toward consumption of digital news, the traditional newspaper industry continues to experience revenue declines and a general erosion of its subscriber base.

Advertising revenue fell $1.8 billion in 2016 amid declining circulation numbers for all major print publications, according to a Pew Research Center analysis published Thursday.

Circulation for the all U.S. daily newspapers in 2016 was estimated at 35 million people for weekday and 38 million for Sunday, both of which plummeted by 8 percent from the previous year, the study said. For context, circulation numbers hovered consistently around 60 million from 1960-1990.

Alt-weekly newspapers, which employ the free-newspaper model with a heavy focus on Arts and Culture also saw declines in circulation to 61,000, down 6 percent from 2015, the study said.

The industry’s revenues and subscriber base has taken a hit, steadily declining since 2000 – when the consumer switch to digital news really took hold.

However, the report does contain positives for the news business as it looks to adapt to the changing business landscape.

Newspapers witnessed their highest digital circulation numbers ever, with the average number of unique monthly visits to the top 50 U.S. daily newspapers climbing from 9.7 million in 2015 to 11.7 million in 2016, a 21 percent rise.

“Yearly financial statements show that The New York Times added more than 500,000 digital subscriptions in 2016 – a 47 percent year-over-year rise,” wrote Michael Barthel, a Pew research associate.

The positive trends come with caveats, including the inability to measure digital trends throughout the industry because many daily newspapers in smaller communities do not generate enough traffic to their websites to be measured.

Another problem for the industry is its continued reliance on print for the majority of its advertising revenue.

However, digital as a portion of total revenue rose to 29 percent in 2016, its highest level ever. It was 25 percent in 2015 and 21 percent the year before, indicating the Industry may be learning to better capitalize on the flight to digital.

Nevertheless, the digital revolution has unquestionably harmed the newspaper industry financially and in terms of its workforce, with the number of reporters and editors working in the business falling by 37 percent since 2004.

In 2015 (the last year available), 41,400 people worked as reporters or editors in the news industry, down 4 percent from the year before.

Meanwhile, the television cable news business has not only weathered the storm of digital disruption but thrived, according to a separate but related Pew analysis.

Cable TV viewership numbers rose dramatically across the board, likely bolstered by a particularly contentious election season.

“In prime time, combined average viewership for the three major news channels (CNN, Fox News and MSNBC) increased by 55 percent to 4.8 million viewers,” Katerina Eva Matsa, a Pew senior researcher with a focus on journalism, wrote in the study.

The increased viewership created a robust business environment for cable television, with the total revenue across the same three channels expected to rise by 19 percent to a total of about $5 billion. It includes increases in both advertising revenue and dollars gained through licensing fees.

Profits for the major three outlets are expected to increase to $2.7 billion, a 29 percent increase. The extra profits have led to more investment in talent in the newsrooms. The networks funneled 6 percent more money for talent investment from 2015 to 2016 –  for a total of $682 million, according to the study.

 

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