Newspapers to be $20b short

Editor & Publisher reports on a study that says the newspaper industry will face a $20 billion revenue shortage over the next five years, due principally to declining circulation.

The firm based its projection on the industry's reliance on paid circulation, which has been slipping at an alarming rate over the past several years. "The entrenched habits of using the Web will only deepen the circulation decline," wrote lead analyst Ken Doctor in the report. "Couple that change with less-meaty print products, more free daily and weekly competition, and newsprint pricing increasing in the 5% to 8% range, and the problems multiply."

On the advertising front, the report said that only the classified category has shown promise (and subsequently is the one category propping up revenue). Newspapers are feeling the consolidation of retail stores and national advertising is unlikely to spring back unless publishers can track results.

As we reported last month, the Federated-May merger alone, with its consequent change in Federated's ad strategy, may cost the newspaper industry $425m annually.