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Newspaper revenue rebounding? A lot of pigs with lipstick

When the phonograph was invented, people still bought pianos.When movies, then radio, then television arrived on the scene, people still bought books, magazines and newspapers.

But the Internet is having an impact on everyday life far beyond that of any other communication innovation. You couldn’t carry a record player or a TV in your pocket. You could carry a radio — 35 years after they first came on the market — but you couldn’t create your own programming; you were at the mercy of whatever station you were listening to.

It took smartphones to really unleash the power of the Web. Now the majority of us carry a phone — which is, in reality, an extremely powerful minicomputer. There’s very little we can’t do with it: watch a movie, check stock listings, browse museum galleries, make a dental appointment, transmit photos — virtually the whole range of human activity can be transacted on a smartphone.

The transition to digital was reinforced for me yet again when I looked at the 2011 media forecasts in Brandweek magazine. Online U.S. ad spending is forecast to grow about 11 percent in 2011, to about $28.5 billion.

That should put it well ahead of newspaper advertising, which will end 2010 at around $26.5 billion and is expected to drop by single digits during 2011.

To put that in perspective, newspaper ad sales as recently as 2005 totaled $49.5 billion. That same year, online ad spending was around $12 billion. Since 2005, newspaper advertising has shrunk by about half, while online ad spending has more than doubled — two trains speeding in opposite directions.

National TV ad revenue is right in the same range as newspapers and online — forecast at around $27 billion for 2011, with growth in the mid-single digits.

So here’s how the biggest players look: Online, newspapers and TV are all roughly equal right now. But newspapers are steadily losing revenue, while national TV shows modest growth and online is still gaining at a double-digit clip.

It’s been darkly funny in recent weeks to read the comments of newspaper company executives translating their third-quarter financial results. Basically, they’ve all expressed optimism because they’re not losing revenue at nearly the rate they were last year. Instead of hemorrhaging 25 percent a quarter, they’re only down 5 or 6 percent.

I root for newspapers, but there are definitely a lot of pigs with lipstick running loose in those quarters.

A few other nuggets from the Brandweek forecast:

• Tablet media sales (e.g., iPads) will jump worldwide from about 20 million this year to more than 150 million in 2013. (Here’s an interesting item on how the iPad might zero in on newspapers’ most loyal customers.)

• Magazine advertising revenue by 2014 will be about two-thirds what it was in 2007.

• 40 million U.S. homes already have a gaming console with a broadband Internet connection.

• Ad-supported cable TV viewership passed network viewership in 2002, and now grabs 51 percent of the U.S. viewing audience, vs. 28 percent for the four major networks.

Comments (1)

  1. Submitted by Jean Cole on 01/03/2011 - 04:17 pm.

    “Virtually the whole range of human activity can be transacted on a smartphone.”

    I don’t THINK so.

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