Overall, total revenue for U.S. newspapers declined by 2% in 2012 from a year earlier, according to new data compiled by the Newspaper Association of America.
In total, the U.S. newspaper media industry took in $38.6 billion in 2012 compared with $39.5 billion in revenue in 2011, according to NAA’s projections.
The numbers reveal that while advertising revenue continues to decline—down 6% in 2012—several other categories of newspaper media revenue are now growing. Circulation revenue grew 5% in 2012, while a host of new revenue sources not tied to conventional advertising and that barely existed a few years ago grew by 8%. These new revenue sources, which include such items as digital consulting for local business and e-commerce transactions, now account for close to one-in-ten dollars coming into newspaper media companies. They are significant enough in scale that NAA has begun to collect detailed data about these revenue categories and track their trajectory year-to-year for the first time.
The new data offer a more granular and comprehensive picture of how newspaper media are operating today than was previously compiled by any source. This more complete accounting identifies approximately $6 billion in additional revenue, $3 billion that was not counted before and another $3 billion that did not exist a few years ago, comprising about 16% of all newspaper media revenue in 2012.
The numbers portray an industry that, faced with significant disruption in the last decade, has begun to measurably change its essential revenue model. That has begun by turning more to circulation, to digital, and to developing new revenue sources.
“America’s newspaper media are transforming themselves,” said Caroline Little, NAA President and CEO. “In virtually every community they serve, newspapers have the biggest newsrooms, the best-known brands and significant audience market share. Now they are building on those to find new ways to serve audiences and local businesses.”
The overall composition of newspaper revenue, the data show, has thus also changed. Based on data from companies that provided detailed breakdowns, circulation now makes up 27% of total newspaper media revenue, new revenue sources 8%, digital advertising 11%, niche publishing and direct marketing 8%, and print advertising 46%.
These are among the findings of NAA’s annual revenue review of the industry. The data are collected from some 17 companies, private and public, that represent a broad sample of daily newspaper operations across the United States. As it has for many years, NAA uses the sample to project total revenue for the industry overall. That sample represents roughly 40% of the daily newspaper circulation in United States and half of the industry’s revenue. For the specific revenue category analysis, NAA has data from 15 different companies, again private and public, that provide breakouts at a much more detailed level. Thus while a sample rather than a census, this is the most complete data set of newspaper media revenue performance available.
The figures are for American newspaper operations and do not include totals for such things as any international operations or other enterprises owned by companies with newspaper media holdings.
Among the findings:
- NAA projects that of the $38.6 billion in total revenue in 2012, $18.9 billion came from print advertising, $3.4 billion from digital advertising, $2.9 billion from advertising from direct marketing/niche and non-daily publications, $10.4 billion from circulation and $3 billion from new revenue sources. In 2011, of the total revenue of $39.6 billion, NAA projects $20.7 billion came print newspaper advertising, $3.2 billion from digital advertising, $3 billion from direct marketing/niche and non-daily publications, $10 billion from circulation and $2.7 billion from new revenue sources. (The projections do not include revenue from weekly papers not owned by daily newspaper companies.)
Note: Based from detailed breakouts from 15 companies
1. Advertising Revenue
- Advertising in printed daily and Sunday newspapers dropped 9% in total for 2012, according to data from 15 companies that provided detailed breakouts by category. Retail advertising was off 8%, national advertising dropped 15%, and classified advertising declined 9%. Within the classified category, automotive slumped 9%, real estate fell 12%, recruitment fell 8%, and all other classified edged down 5%.
2. Circulation Revenue
- Circulation revenue rose 5% in 2012 for the total newspaper industry in 2012.
3. New Revenue Sources
Newspaper media are developing revenue from a host of new categories that virtually did not exist a decade ago. Among them:
- Digital agency and marketing: More than half of the companies (nine of the 15 reporting detailed data) reported revenue from digital agency and marketing activities, in which they help local businesses market their products, particularly digitally, in social and mobile. Revenue from digital agency and marketing services from those nine companies rose 91% during the year.
- NAA for years has provided industry projections for circulation and advertising revenue, based on a broad sample of private and public company data. This year, NAA derived data from 17 different companies, including 10 privately held. Due to the level of detail requested, companies provided data with the assurance of confidentiality.
First Published: April 08, 2013