U.S. Newspaper Industry Decline to Continue in 2018 & Beyond: Print Media Revenue to Drop by $3 Billion

U.S. Newspaper Industry Decline
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The U.S. newspaper industry is observing a decline these days as it is shifting from print to digital publishing. In the competition of print vs. digital, the digital sector is moving toward progress. The forecast for 2015 to 2020 predicts that the digital platform will grow by 9.8% annually and the non-digital platform will experience a fall of three percent.

That said, print still dominates because over half of Americans still read print newspapers. But consumers couple their print media with newer digital forms like web and mobile. The shift toward the digital platform is leading to job losses in the print media sector. The number of employees declined from 256,800 in 2010 to 183,200 in 2016. Print media revenue is also predicted to decline from around $30.5 billion in 2016 to $27.0 billion by 2020.

Newspaper ad revenue is also projected to decline by “low-to-mid teen percentages” through the first half of 2018, as per the Moody’s Corporation (NYSE:MCO) forecast. National newspapers are expected to suffer more than community newspapers. In 2004, newspaper ads made up around 26% of total U.S. advertisings. Now, it’s less than 10%.

Alina Khavulya, VP and senior analyst at Moody’s said, “Technology-driven shifts in consumer reading habits keep hurting newspapers, and competition for advertisers continues to rise from search engines, social media and digital video.” The newspaper industry is dying as digital power is eating up the print platform.

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Newspaper Industry Lost Half Its Workforce Since 2001 Due to Digital Media Rise

The newspaper industry has experienced more than half of the job losses since 2001 due to the transition from print to digital media.

The number of U.S. newspaper employees fell from 412,000 in January 2001 to 174,000 in September 2016 as per the data from the Bureau of Labor Statistics. On the other hand, the number of jobs in the Internet publishing and portal segment increased from 67,000 in 2007 to 206,000 in 2016. This reflects the transition from the print to the digital media sector causing several job cuts in the newspaper industry.

The same report confirmed that the number of newspaper industry businesses declined about 18%, from 9,310 in 2001 to 7,623 in 2016. Meanwhile, the number of Internet publishing and web search portals increased 150% from 2007 to 13,924 in 2016. Even magazines, book publishing, and radio broadcasting showed a decline, whereas the television industry jobs have been stable since 2001. The number of periodicals declined from 9,232 in 2008 to 7,566 in 2016.

Import Duties on Paper from Canada Expected to Hurt the U.S. Newspaper Industry More

The U.S. newspaper industry decline is a cause of the trend shift toward digital media. A trade dispute with Canada is making an extra effort toward it.

Kevin Mason, the managing director of Vancouver-based ERA Forest Products Research, said the U.S. is imposing preliminary countervailing duties of 15% to 25%. Canada is the world’s biggest maker of newsprint because of its vast forest resources, and the U.S. is its top customer.

North Pacific Paper Corporation, a paper mill based in Longview, Washington, has filed a trade complaint. It claims that Canada subsidizes its industry by giving companies like Montreal-based Resolute Forest Products Co. an unfair advantage to preserve a dominant position in the market.

The newspaper industry had been hit with three price hikes in a short period after about 18 months of the relatively stable price. The first hike was five percent on October 1, then 2.5% on December 1, and another 2.5% at the start of this year. Moreover, they are expected to grow further.

Industry players, including North America’s largest newsprint producer, are of the view that U.S. newsprint duties from Canada will support the transition from print to digital, threatening thousands of jobs on both sides of the border.

Resolute Forest Products spokesman Seth Kursman said, “There are 600,000 workers in the newspaper publishing sector as well as the commercial printing sector who are at risk.”

The higher cost will trouble the U.S. newspaper industry, which is already declining.

Many publications have closed as print-advertising revenue went down 80% since 2005. The New York Times Co (NYSE:NYT) alone spent $72.0 million, about five percent of its operating cost in 2017. It had also affected hundreds of smaller papers having limited financial resources.

As per the ERA Forest Product Research, it is predicted that along with newspapers, the cost for commercial printers and publishers will rise.

New trends and digitalization are causing many industries to fall beyond expectations. The U.S. newspaper industry decline is an addition to it.

 

Sources

U.S. Newspaper Industry – Statistics & Facts,” Statista, last accessed January 22, 2018.

Publishing To See Continued Declines In Ad Revs,” MediaPost, March 22, 2017.

Over half of U.S. newspaper jobs lost since 2001 as online media grows,” The Japan Times, April 4, 2017.

U.S. newsprint duties will accelerate shift to digital, says industry business,” Financial Post, January 10, 2018.

Newsprint cost to rise as US imposes tariffs on Canadian paper makers,” Daily Herald, January 16, 2018.

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