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timeliness
of that theme was brought into clear focus Thursday when
the Newspaper Association of America (NAA)
reported massive year over year revenue losses
across the industry for the 4th quarter of 2008. The
numbers were even worse than I could have
imagined and as you know I have been following the train
wreck in the newspaper business for a long time
now. Erik
Sass broke down the bad news from the NAA in a post
in his Media
Daily News column Thursday. Newspapers
lost a stunning 20.6% of their print ad revenue
in the last quarter. Perhaps even more ominous, their
online revenues (the income stream many of them are
looking to for salvation), fell 8.1% after
several years of double digit increases. Sass said,
"ultimately their online strategies proved
brittle and shortsighted" indicating that the
papers are being outmaneuvered by nimbler online
companies that are more savvy about what it takes to
succeed on the web. |
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Sass said
the confluence of two trends - a long-term shift in
print ad dollars to the Internet and one of the worst
economic downturns in American history - have created
the perfect storm for newspapers. However he
added that their decline began long before the current
recession, with the first major cracks appearing in 2004
when their cash cow - classified advertising - starting
teetering toward collapse.
Sass wrote, "The first
classified category to feel the effects of Internet
competition was automotive, where ad revenues
have fallen continuously since the second quarter
of 2004. Online recruitment also went south
before the recession, with continuous declines
since the second quarter of 2006. Then the recession
piled on, beginning with the housing market
meltdown in 2006, which turned the last successful
classified category from a gold mine into a rubble
heap."
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The numbers in
classified advertising are indeed stunning. In
the fourth quarter of 2008 automotive dropped
39.2%; real estate fell 41.3%;
and job recruitment plunged an alarming
51.8%. |
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As traditional
media outlets continue to crumble owners of .com
city domains hope to position themselves as the
preferred media platforms of the future. Ways to
seize that opportunity will be the focus of the
GeoDomain Expo next month and it promises to be
a very interesting conversation. I'm looking
forward to sitting in on it.
(Posted March
27, 2009) |
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