For newspapers, a 2 percent decline is good news

April 8, 2013

For the beleaguered newspaper industry, the good news may be that the bad news isn’t getting worse.

Newspaper revenue fell just 2 percent last year compared with 2011, according to new data compiled by the Newspaper Association of America, the industry’s main trade group.

Although that’s hardly cause for celebration, the slight decline is a man-bites-dog story for an industry that has been devoured in recent years by online competition and has been hemorrhaging readers and advertisers. During the preceding six years, industry revenue plunged 42 percent, according to NAA figures.

In fact, print advertising revenue continued to shrink, falling 9 percent last year. The more hopeful sign is that some of those losses are starting to be made up by other sources, the group said. Circulation revenue, for example, grew 5 percent, driven by price increases for print subscriptions and by digital subscriptions. It was the first time circulation revenue has grown since 2003.

About 450 of America’s 1,390 daily newspapers now have “paywalls” around their online content, drawing revenue from readers for news the publications had previously given away. Many newspapers, including The Washington Post, which has said it will erect a paywall this year, are hoping that digital subscriptions will become a significant revenue source, replacing lost ads.

Newspapers also appear to be making progress in developing new businesses outside of gathering and distributing the news. These businesses — e-commerce, event sponsorship and dispensing advice to local merchants on digital ad strategies, among others — grew 8 percent last year. They account for about $3 billion of the industry’s $38.6 billion in revenue, the trade group reported.

“Most projections I’ve seen say the worst is over” for newspapers, said Tom Rosenstiel, executive director of the American Press Institute, which helped the NAA produce its data (the two organizations, both based in Arlington, are allied but governed separately). “What this data show is that there are some growth areas. The pattern is different from the last few years.”

Economic recovery and the widespread use of tablet devices, whose format mimics that of broadsheet newspapers, could further boost business, Rosenstiel said.

But he added that it is difficult to project a growth rate for the industry’s new revenue sources. Many publishers were once hopeful that online ads would replace those lost in print. Instead, digital advertising has grown slowly, and it still accounts for only about 10 percent of newspaper sales.

Paul Farhi is The Washington Post's media reporter.
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