If recent news from the newspaper industry is a sign that revenue dropped another 10% in the second quarter of the year, that would put it on a pace to be about the same as the falloff in 2017.
Most large companies have forecasts that take them out a few months, if not a year. These are based on both economic data and intelligence about their own industry. At the end of the first quarter, and midway in the second, these papers include the Las Vegas News-Journal, the Salt Lake Tribune and many of the Digital First Media’s papers, particularly the Denver Post, The New York Daily News and SeattlePI.
A recent study by Pew Research Center shows that heavy industry layoffs that began last year have extended well into 2018:
At least 36% of the largest newspapers across the United States – as well as at least 23% of the highest-traffic digital-native news outlets – experienced layoffs between January 2017 and April 2018, according to the study. Among newspapers, those with the highest circulation were most likely to be affected.
The mix of revenue that newspaper publishers hoped would pull the industry out of its trouble has not, for the most part, worked. Publishers continue to face a decade-long drop in print advertising and circulation revenue. While rising online readership and digital advertising has helped offset the print falloff, growth in that digital advertising market has slowed.
The final hope for most newspaper publishers to increase revenue is to get the consumer to pay for online subscriptions. This means turning many newspaper sites that offered free access to ones with paywalls. According to media experts, the Minneapolis Star Tribune has done an excellent job of this. It has 55,000 paid subscribers. However, this compares to the online paper’s 7 million unique monthly visitors. Even a successful digital subscription campaign, this shows, has posted the most modest success.
What newspapers have been able to charge online subscribers is low, in most cases. A case in point, which is reflective of industry pricing, is that the Salt Lake Tribune charges $7.99 for a digital subscription. A 12-week subscription to the print version of the paper costs $90. Digital pricing is often lower than pricing for print editions.
If the layoffs that began last year as revenue across the industry dropped about 10% are any indication of what papers have to do to maintain margins, then the second quarter of 2018 should see the sector’s revenue drop at a similar pace.