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Opening Arguments

Off the charts

Here is the most depressing chart I've seen in some time:

Basically we now take in the same amount we did in 1950, about $20 billion a year, which is still a nice piece of change. But:

So the reason newspapers are in trouble isn't that they aren't making lots of money -- they still are; advertising is a huge, huge business, as any app developer will try to tell you -- but that their business models and payroll depend on so much more money. The U.S. newspaper industry was built to support $50 billion to $60 billion in total advertising with the kind of staffs that a $50 billion industry can abide. The layoffs, buyouts, and bankruptcies you hear about are the result of this massive correction in the face of falling revenue.


Harl Delos
Thu, 03/01/2012 - 5:22pm

Revenue is only half of the picture.  In 1950, newspapers relied on hot metal, which was cheap.  Today's newspapers use offset, which requires a lot of expensive non-recyclable supplies.  The 1950 newspaper was on cheap pulp.  Today's uses expensive groundwood.  The 1950 newspaper was b/w.  Today's requires four passes to lay down color ink.

In 1950, virtually all advertising was ROP. Today, much is inserts.  And in 1950, 25% of a newspaper's income was subscriptions and single-copy sales.  Today, it's less than 15% - the cost of the average newspaper doesn't even cover the expense of the paper, ink, and delivery.