Friday, December 5, 2008

Ad losses send industry into a tailspin

On Thursday, Colorado's oldest newspaper joined the growing list of dailies on the market. E.W. Scripps Co., owner of the 149-year-old Rocky Mountain News, offered to sell it after reporting an $11 million loss through the first nine months of this year.

"It's a terrible time to put the Rocky Mountain News up for sale, clearly," said John Morton, a veteran newspaper-industry analyst in Maryland. "Whatever price they might attract probably will be quite low. I think it's going to be very difficult to find a buyer."

The main culprit in the newspaper business decline: shrinking classified-ad sections.

Newspapers depend on advertising for about four-fifths of their revenue, and at big-city dailies, the classifieds used to bring in half of that money.

Through 2005, print-advertising revenues grew nationwide, according to Newspaper Association of America data. But the industry took a $5 billion loss in advertising dollars during the next two years, and this year could be much worse.
In the third quarter of 2008, print-advertising revenues were down 28 percent from the third quarter of 2005. Most of that loss came in the classifieds.

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