Saturday, August 18, 2012

Will readers be more important than advertisers?

For the first time since the 1890s, a major daily newspaper is receiving more revenue from readers and circulation than from advertising. New York Magazine reported this turn-around in an article on the second-quarter 2012 report from the New York Times Co.

(The New York Times is "probably the first major paper that has crossed that line," media analyst Ken Doctor said. "It is an interesting moment."

Print and digital advertising continued to fall for the Times Co. and its three newspapers, including the flagship New York Times. That shortfall still remains to be addressed. For the second quarter, advertising fell by 6.6 percent to $220 million. However, circulation revenue increased 8.3 percent to $223 million because of the Times' successful paywall and subscription price hikes.

The MediaNews Group newspaper chain also crossed the circulation vs. advertising line for the first time in January 2012, the magazine reported.

The demise of the nineteenth-century penny press circulation wars has led to newspapers' overwhelming reliance on advertising revenue ever since. The massive drop in ad revenue due to Internet competition is forcing newspapers to look more to their readers for support. "We have the pieces of an emerging business — we just have to see how far how far we can go," Doctor said.

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