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Friday, August 28, 2009

Newspaper Ad Revenue Down 29%.....

.....and I bet you won't read that in your local newspaper. I estimate newspapers get 40-50% of their total revenue from ad revenue. The rest comes from reader subscription fees. But a 29% drop in half of a business' revenue is enormous. Most businesses would not be able to survive without significant changes to their business model. Lastly, how much more red ink can the media spill? Before they stop putting a happy face on this economy in an effort to save the Obama economic team which has failed so far bigtime!

SAN FRANCISCO (AP) -- Newspapers' financial woes worsened in the second quarter as advertising sales shrank by 29 percent, leaving publishers with $2.8 billion less revenue than they had at the same time last year. It's the deepest downturn yet during a three-year free fall in advertising revenue -- newspapers' main source of income. The magnitude of the industry's advertising losses have intensified in each of the last 12 quarters..........Still, the statistics served as a stark reminder of the crisis facing newspapers as they try to cope with a brutal recession and advertising trends that have shifted more marketing dollars to the Internet............the latest turbulence left U.S. newspapers with ad sales of $6.8 billion in this year's second quarter compared to $9.6 billion last year......through the first half of the year, newspaper ad revenue plunged 29 percent to $13.4 billion....."When the economy eventually begins its recovery, advertisers will return to spending, and newspapers will find themselves extremely well positioned to harness the strength of their print and digital platforms to build a brighter future," Strum predicted. .......Industry analyst Ken Doctor of Outsell Inc. isn't as confident. In a report released earlier this week, Doctor predicted newspapers won't recover all the advertising revenue that has evaporated during the past three years because be believes the recession accounted for only half of the decline. The other half of the equation represents ad spending that has permanently migrated to less expensive options on the Internet, Doctor said......Even newspapers' Internet advertising suffered in the second quarter. The industry's online ad revenue totaled $653 million, a 16 percent drop from last year.

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