Little: Newspapers still here, and still making money
The sky is always falling and newspapers are always dying.
Though newspaper media are enjoying the largest audiences ever as well as continuing to play a unique and critical role in our communities, there is one fact that tends to be obscured or ignored – newspapers are making money and newspapers remain a good investment.
A year ago, John Henry and Jeff Bezos made high-profile acquisitions of The Boston Globe and The Washington Post, respectively, which confirmed that newspapers are viable investment options with the ability to grow. Earlier this month, The Washington Post announced record web traffic for July as well as hiring more than 60 people in the first seven months of the year.
A company hiring 60 people in seven months sounds like a healthy one to me.
This summer, the newspaper industry has seen a wave of spin-offs, with Tribune and Gannett both forming publishing-only companies. E.W. Scripps and Journal Communications spun their combined publications off into a new company, Journal Media Group. This is an exciting time for the newspaper industry as these companies will now devote their undivided attention to their publications.
However, as with investments last year, these spin-offs have been spun into more gloom and doom for the industry. It is not accurate.
In fact, buried in the depths of one particular article that signaled the death of newspapers is this gem of a sentence: “Newspapers continue to generate cash and solid earnings.”
Think about that for a moment – an industry that generates cash and solid earnings is on its death bed? I refuse to accept that.
What is true is the business model has changed dramatically in the past half-dozen years. In 2007, 80 percent of newspaper revenue was generated from advertising. In 2013, less than half of total revenue (46 percent) was from advertising in the daily and Sunday print newspaper. Revenue from readers paying for print and digital news and information accounted for nearly three out of 10 revenue dollars, up from less than two in 10 in 2007. Income from new, non-traditional sources is rising rapidly.
What is also true is that the public’s thirst for news keeps rising.
There is more demand than ever for news and journalism. There are also more competitors.
In my three years as CEO of NAA, I have witnessed a transformation. Newspaper companies look different in 2014 compared to 2011. There has been an increased focused on digital properties. Newspaper reporters and columnists have taken advantage of Twitter to build brands and large readerships. Innovation on the design side has led to beautiful works of long-form journalism include The Unforgotten by the Boston Globe and Breaking Ball from The Wall Street Journal that ran in July.
For me and many in the newspaper industry, it is a fascinating and exhilarating time. We are in the midst a historic shift for an industry that has been around as long as the United States.
The world has changed and newspapers have changed. Despite all the changes, one thing remains the same – newspapers still make money.
Little is CEO and president, Newspaper Association of America.