Decline of newspapers

The decline of newspapers has been widely debated, as the industry has faced dropping newsprint prices, slumping ad sales, the loss of much classified advertising and precipitous drops in circulation. In recent years the number of newspapers slated for closure, bankruptcy or severe cutbacks has risen, especially in the United States, where the industry has shed a fifth of its journalists since 2001. Revenue has plunged while competition from Internet media has squeezed older print publishers.

The debate has become more urgent lately, as a deepening recession has cut profits, and as once-explosive growth in newspaper Web revenues has leveled off, forestalling what the industry hoped would become an important source of revenue. One issue is whether the newspaper industry is being hit by a cyclical trough and will recover, or whether new technology has rendered newspapers obsolete in their traditional format. To survive, newspapers are considering combining and other options, although the outcome of such partnerships has been criticized. Despite these problems, newspaper companies with significant brand value, which have published their work online, have a significant rise in viewership.

The newspaper industry has always been cyclical, and the industry has weathered previous troughs. Television's arrival in the 1950s began the decline of newspapers as most people's source of daily news. But the explosion of the Internet in the 1990s increased the range of media choices available to the average reader while further cutting into newspapers' dominance as the source of news. Both television and the Internet bring news to the consumer faster and in a more visual style than newspapers, which are constrained by their physical format and their physical manufacturing and distribution. Competing mediums also offer advertisers moving images and sound. And the Internet search function allows advertisers to tailor their pitch to readers who have revealed what they are seeking—an enormous advantage.

The Internet has also gone a step further than television in eroding the advertising income of newspapers, as — unlike broadcast media — it proves a convenient vehicle for classified advertising, particularly in categories such as jobs, vehicles, and real estate. Free services like Craigslist have decimated the classified advertising departments of newspapers, some of which depended on classifieds for 70% of their ad revenue. Research has shown that Craigslist cost the newspaper industry $5.4 billion from 2000-2007, and that changes on the classified side of newspaper business led to an increase in subscription prices, a decrease in display advertising rates, and impacted the online strategy of some newspapers. At the same time, newspapers have been pinched by consolidation of large department stores, which once accounted for substantial advertising sums.

...
Wikipedia