US newspaper ad revenue drops 28 pct to $6.4B

AP News
Posted: Nov 19, 2009 6:25 PM

U.S. newspapers' advertising woes persisted through the summer, increasing the likelihood that publishers will finish this year with their lowest ad sales since the 1980s.

Newspapers' ad revenue totaled $6.4 billion in the third quarter, a 28 percent drop from the same time last year, according to figures released Thursday by the Newspaper Association of America.

Advertising sales are the main source of newspaper income, and that revenue has declined year-over-year for 13 straight quarters. The slump already has killed some newspapers and wiped out thousands of jobs at publications across the country.

The misery has worsened this year as the recession exacerbated the challenges that newspapers already were facing from less expensive advertising alternatives on the Internet.

Through the first nine months of the year, newspapers ad revenue plunged 28 percent to $19.9 billion. Barring an unforeseen recovery, U.S. newspapers' annual ad sales are on pace to fall below $30 billion for the first time since 1987.

About the only good news to emerge from the July-September period is that the erosion wasn't quite as bad as the previous quarter when newspaper advertising revenue dropped 29 percent rather than 28 percent.

Still, U.S. newspapers collected $2.5 billion less in advertising revenue during the quarter than they did at the same time last year. For the first nine months, total ad sales were off by $7.9 billion.

Newspapers have been trying to offset some of the erosion by raising the prices charged to their readers. The New York Times ended up getting more money from readers than advertisers during the third quarter, a rarity in an industry where circulation typically accounts for just 20 percent of the revenue.

But the higher prices are alienating many subscribers, contributing to steep declines in paid circulation at many of the largest U.S. newspapers. The average weekday circulation among 379 U.S. newspapers fell 10.6 percent during the six months ending in September, according to Audit Bureau of Circulations.

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With fewer people buying newspapers, advertisers seek lower rates _ a threat that could give publishers even more headaches.

Newspaper executives are hoping their higher prices will prove the loyalty of their remaining readers. Publishers also are trying to drum up more revenue online _ both from readers and advertisers. But their biggest hope is that ad revenue will return to their print editions as the U.S. economy recovers from the worst recession since the 1930s.

"There may not be great visibility into 2010 and beyond, but the broad consensus is that the worst has passed," said John Sturm, president of the Newspaper Association of America.