Media executives may see recent data on advertising revenues from the Newspaper Association of America as a good news / bad news situation. They would be wrong. It’s all bad news.
Newspaper ad revenues are down 29% during Q2 of 2009. Obviously bad news. But even their online ad revenues had a double-digit drop of 16%.
So what’s the good news that publishers see? The worst is behind them. Wrong again. The worst is still ahead.
The recession only explains half the loss in print ad revenues. The rest (about 13% of the loss) is pure erosion of the print newspaper business model.
As newspaper publishers search for an online news model that can sustain their revenues and newsrooms, they must apply basic investment strategy … diversify, diversify, diversify.
If you are only business is news, you are heading for a cliff. Yes, you need a digital platform for news. But you also need platforms for other categories of digital content. Either build them, buy them or merge with other companies that already have them.
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