Last week, the Capital Times, a 90-year-old newspaper in Madison, Wis., stopped printing. But it didn’t shut its doors completely. Rather, the paper cut 20 staff members and moved its operations entirely to the Web. In doing so, it lived out the industry’s worst nightmare.
It’s no small secret that things have been going badly for the newspaper industry for years now. Newspapers big and small have been struggling with the same troubles that haunted the Capital Times-falling revenue and sinking circulation. But the latest circulation data in the U.S. suggests the problem may be even worse than once thought, as readers and advertisers alike are moving online at an alarming rate.
The New York Times, which this month announced it is cutting 100 newsroom jobs, saw its circulation drop almost four per cent from the previous year, according to the Audit Bureau of Circulations. At the Los Angeles Times, it fell more than five per cent. While most of the 10 largest papers in the U.S. experienced declines, the biggest drops were among mid-sized newspapers, such as the Boston Globe, where circulation was down more than eight per cent. “We think the industry was expecting an improvement in trend and thus we view this result with some degree of alarm,” said Deutsche Bank analyst Paul Ginocchio, in a report last week.
Economic troubles in the U.S. have exacerbated the problem, as companies have cut back on their ad spending (the lifeblood of the industry). Most observers predict those ad dollars, like readers, will increasingly shift to the Internet, and newspapers may face a hard choice: move online or die.
Newspapers already have websites, but for now, they are filled with expensive content supplied by the print operation. And while people may be moving online for their news, revenue isn’t following as quickly. That leaves many wondering where the money will come from if they do follow their readers to the Web. One thing is for sure: they’ll be watching how the Capital Times fares closely. M
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