Newspapers Digital Future is Bleak

A new study by the Pew Research Center’s Project for Excellence in Journalism reveals that newspapers are struggling to offset print revenue losses with digital revenue.

The study was conducted using data supplied by 38 newspapers across the country representing a mix of circulation levels in an effort to accurately reflect the overall makeup of the industry in the U.S. What Pew found is that while some papers are experiencing a rise in digital revenue, many executives think it will at best be several years before digital revenue finally offsets the print revenue losses:

“Executives at the 13 companies involved in this report confirmed that closing the revenue gap remains an uphill and existential struggle. The most optimistic projections saw digital gains overcoming print losses within a few years; the most pessimistic held that it would never occur. A number of executives said they did not know when it might happen.”

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According to Pew, newspapers are taking in $11 in print revenue for every $1 of digital revenue. But because print-ad revenues at the newspapers in the study were down 9%, they lost $7 of print revenue for every $1 of digital revenue they gained. That isn’t a sustainable economic model, especially for the small newspapers with limited resources that represent a majority of the papers in the U.S. One of the problems the study found is that newspapers focus a majority of their digital efforts on the two largest areas of digital advertising — banner ads and classified ads. But while those two areas also provide a majority of the digital revenue, growth has stalled as advertisers seek newer platforms such as mobile devices which the papers have been slow to embrace. Another and possibly more damaging problem is the culture of “inertia” that makes change more difficult, according to one senior executive quoted by Pew. Technology has advanced rapidly in the last few years, but newspapers have been slow to adapt to these changes. First it was the Internet, with alternative news sites sucking away print newspaper readers, then it was social media sites like Facebook and Twitter. Now it’s mobile devices, thanks to the explosion of smartphones, that have captured readers’ attention. Newspapers will need to get over this culture of “inertia” and become less dinosaur-like in how fast they adapt to change, if they want to avoid extinction.