U.S. newspaper industry struggling
A long-term challenge
The newspaper industry has faced competitive pressures for some time.
Changing work and lifestyle patterns from the 1970s on led to the demise of the evening newspaper in almost every city; Washington's evening Star folded in 1981. The rise of cable television news outlets in the '80s drained off more would-be readers who decided they no longer needed to turn to the newspaper for news.
To win back readers in the '80s and '90s, redesign was the rage as newspapers tried to ape television. Newspapers tried all manner of visual gimmicks -- color photos and boxes, shortening stories, adding referral lines and bullet points and news summaries. Some Gannett Co. papers even invited folks in off the street to join news meetings and help decide which stories were going to appear in the next day's papers.
And yet, daily circulation across the industry has declined every year since 1987; Sunday editions, since 1990. The Washington Post, for instance, has watched its average daily circulation drop from 779,898 to 709,500 in the past five years.
"It's challenging, and the newspaper is adapting and operating more effectively in many areas," said Post Publisher Boisfeuillet Jones Jr. "If we focus on doing the business of journalism well, the newspaper and Web site should both be able to grow revenues."
Asked if The Post newspaper could ever regain circulation, Jones said: "In parts of the Washington area, we have had years where we've gained a little on the daily side. Overall, though, I don't know."
Vicious cycle
Circulation loss in itself is not debilitating from a revenue standpoint. In general, paid circulation accounts for about 20 percent of a paper's revenue, with the rest coming from advertising. But ad rates are set by circulation figures: As circulation drops, so too will the amount papers can charge advertisers.
The result can be a vicious cycle. As advertising declines, newsrooms find it more difficult to afford overseas bureaus, extensive national operations and other editorial additions that help produce an authoritative daily report. As they cut back, they risk sending readers elsewhere for news, leading to further circulation declines and lower ad rates.
Adding to the industry's woes is the advent of new free sources of news, many of which appeal to younger readers and time-strapped families. Telecommunications billionaire Philip F. Anschutz started a free daily in Washington, called the Examiner, and has trademarked the name in other cities. Internet giants such as Google and Yahoo tout their ability to compile news from a number of sources, all for free with the click of a mouse.
Some papers, including The Washington Post, are trying to respond to the challenge by distributing free commuter tabloids, filled with abbreviated stories and entertainment news, as well as community papers. The Boston Globe's corporate parent, the New York Times Co., recently announced plans to buy a 49 percent stake in Metro Boston, a free paper that circulates in the New England city.
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