More Gloom-and-Doom For Newspapers

I was embroiled in a discussion (argument) with Chris Nolan earlier this week regarding my apocalyptic pronouncements about the imminent collapse of traditional journalism, especially newspapers. She asked me (more or less) whether I really thought the New York Times, Wall Street Journal, and other premier sources of news and opinion would really be pushed aside by lunatic-fringe bloggers.

My stance is that the economics of newspapers is a mess, based on an odd assortment of junk printed, stuck into the plastic bag, and thrown out of a car window onto your driveway every morning. I said that basically that won’t be happening in a year or two. Chris believes it will be like 30 years.

So, today there is more bad news for the newspaper industry:

[from WSJ.com - Auto Ads Veer Off Newspaper Pages, Head to Web by Joseph Hallinan]

Last week, Tribune Co. said auto-classified revenue at its newspapers plunged 16% in December. Also last week, Lee Enterprises Inc., publisher of papers such as the St. Louis Post-Dispatch, reported a 15.2% drop in auto advertising for the fourth quarter. On Wednesday, McClatchy Co. reported a 20% decline for December, saying the downturn in car ads had finally reached its West Coast papers, the biggest of which is the Sacramento Bee, in the heart of California’s car culture.

[…]

The decline adds to the woes of the newspaper industry, already losing circulation to the Internet. For years, fat sections of car ads were a dependable source of business for newspaper publishers, accounting for 30% of the industry’s total classified ad revenue of $16.6 billion in 2004, the last full year for which figures are available. Even as a migration of job ads to the Internet took a big bite out of newspaper employment classifieds from 2000 to 2003, auto ads held up.

That began to change in 2004. While employment ads began to stabilize, a combination of Web competition and changes in the auto industry led to a drop in spending on newspaper auto classifieds. Revenue from auto classifieds has now fallen for seven straight quarters, to $1.01 billion in the third quarter of 2005 from $1.16 billion in the second quarter of 2004, according to the Newspaper Association of America, a Vienna, Va., industry trade group. Fourth-quarter figures for 2005 aren’t yet available. In a report published last week Deutsche Bank analyst Paul Ginocchio, citing discussions with industry managers, said auto ad revenue was “trending down significantly” in the first quarter of this year as well.

The economics are inexorable, and the advertisers are going online fast. Expect even more layoffs, reformatting to eliminate expenses, foreign bureaus closed, management reshuffles, downsizing, and outright closures.

Some papers — the New York Times, and Wall Street Journal — will survive in some form, but I don’t see them being delivered to your house. You will have to buy them at Starbucks, or the airport. But the great majority of regional papers will just be dead.