The Death of Print: Why Newspapers are Folding

October 25, 2011

By: Chris R. Kramer

Many US newspapers have been grappling with declining circulation, a loss of readership, and a steep drop in print advertising revenue. As a result, some of the nation's largest publishers wound up filing for bankruptcy and stopped the presses for good.

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The Death of Print

Why Newspapers are Folding

Many US newspapers have been grappling with declining circulation, a loss of readership, and a steep drop in print advertising revenue.

Print sales in Q1 2011 were only 45% of the revenues produced by the industry in the first quarter of 2006:

• Q1 2006: $10.5B
• Q1 2011: $4.7B

Audiences Turn to the Web

US Percentages Change in Audience, 2009-2010

• Online: +17.1%
• Local TV: -1.5%
• Network: -3.4%
• Newspaper: -5.0%
• Audio: -6.0%
• Magazine: -8.9%
• Cable: -13.7%

By the Numbers

US Percentages as of July 2011

• 47%: Almost half of all American adults get at least some of their news by cell phone or tablet.
• 84% own a cell phone and/or tablet computer
• 13% of people with cell phone or tablets have a local news app
• 62% of newspapers with 25,000+ in circulation have mobile apps (21% of smaller papers have apps)
• 59% of all newspapers do not have mobile apps, but plan to add them within a year

Newspaper Circulation

Daily and Sunday US newspaper, as % of households, 1940-2010, and selected public policy events relating to media ownership in the USA since 1940

• 1944: FCC rejects a rule barring newspaper ownership of radio. Circulation: 128% Daily, 108% Sunday
• 1969: VP Agnew attacks media "monopolization" and "centralization". Circulation: 100% Daily, 77% Sunday
• 1975: FCC adopts newspaper/broadcast cross-ownership rule. Circulation: 86% Daily, 71% Sunday
• 2003: FCC tries, but fails, to modify cross-ownership rule. Circulation: 50% Daily, 52% Sunday
• 2007: FCC tries to modify cross-ownership rule in 20 largest markets. Circulation: 44% Daily, 45% Sunday

FCC: Federal Communications Commission. It regulates interstate and international communications by radio, television, wire, satellite and cable.

Media cross-ownership refers to the ownership of more than one media businesses (newspaper, broadcast and cable television, radio, book publishing, video games, and various online entities) by a person or corporation. The rules that regulate the concentration of media ownership were changed over the years.

Circulation Decrease

Six Big US National Newspapers. From 2008 to 2009

• San Francisco Chronicle: -26%
• Dallas Morning: -22%
• USA Today: -17%
• LA Times: -11%
• NY Times: -7%
• Washington Post: -6%

Bankruptcy Scorecard

As of 22nd March 2010

• Tribune Co.: Waiting Reorganization Plan. Owed $13 Billion.
• Media News Group: Discharged. Owed $930 Million. Trimmed 82.3% of its debt
• Freedom Communications: Waiting Prepack OK. Owed $770 Million.
• Journal Register: Discharged. Owed $692 Million. Trimmed 67.5% of its debt
• Minneapolis Star Tribune: Discharged. Owed $480 Million. Trimmed 79.2% of its debt
• Philadelphia Newspapers: Arguing terms. Owed $400 Million.
• Morris Publishing Group: Discharged. Owed $415 Million. Trimmed 69.3% of its debt
• Heartlands Publications: In Process. Owed $166 Million.
• Sun-Times Media Group: Discharged/Sold. No debt but projected operating loss in 2009 was 3.8x greater than cash in hand.

Stock Prices

25th May 2001 - 25th May 2010

• NYT: -81.84$
• NYSE:WPO: -30.39%
• GCI: -78.50%