This was originally published in The Record
The newspaper industry has been the subject of more headlines this year than at any time in my career. Some of that is due to the proliferation of new media outlets that report on business issues. But much of the reason is the industry has been raked through the economic coals of this recession. Hey, the media loves bad news. The closing of the Ann Arbor News in July after nearly 175 years in operation was the latest in a series of recent setbacks including bankruptcies, layoffs, retrenchments and closings that drew attention.
So it is understandable if many people have drawn the conclusion that newspapers are on life support and are about to be put out of their misery. Yet there is evidence that the tide has turned, evidenced in part by the work of a research and consulting firm called Borrell Associates. The company – which focuses on interactive marketing but which works with traditional media as well – tracks local advertising.
According to a Borrell report released this month, the decline in newspaper industry revenues will abate after this year, with a 2.4 percent rebound in 2010. Further, it says by 2014, newspaper income will be up 8.7 percent over 2009.
While no industry executive is going to take this projection to the bank, I suspect there was a collective sign of relief when the report was released. The outlook mirrors what many newspaper company executives have been saying, that there is light at the end of the tunnel. But Borrell has a good forecasting track record; it correctly called the severe, long slide of newspaper revenues of the past eight years when newspaper revenue as at an all-time high in 2001. If we had only listened.
Borrell’s report points to the history of radio, which rebounded after struggling with the advent of television in the 1950s, as “a historical reference point”. The medium lost market share but continued to thrive for nearly a half century.
The study is quick to note that the recovery won’t be equal among daily newspapers – that metro markets will have a tougher time – and that the transition requires some tinkering with products and marketing. Newspapers are increasingly focusing on the most highly-educated and highest-income of readers. The industry is making product changes – using more color and devoting less space to world and national news. And newspapers are getting better at focusing on advertising customers’ and readers’ needs.
The report also states that while all traditional media is under siege – newspapers will recover faster than radio, television, direct mail, magazines and yellow page directories because it was the first to be forced into “a period of adjustment” as a result of the Internet. “Now they are scrambling to cope with fundamental changes in their business models, hoping to take some lessons from newspapers,” the report states.
Gordon Borrell issued the following challenge to readers of the report: “We may be dead wrong. The entire industry might die, and scores of papers might go belly-up over the next year. I’d like you to mark your calendar for today’s date, 2010, and see if that’s the case, or if we wound up being right.”
My calendar is marked. Mark yours, too, and we’ll revisit his predictions in a year.