Carpe Diem

Chart of the day: Newspaper ad revenue vs. newspaper jobs

newspaper

Following up on this recent CD post about the stunning free-fall in newspaper advertising revenue over the last decade to a 62-year low in 2012, the chart above displays: a) annual inflation-adjusted newspaper advertising revenue (red line), and b) the annual number of newspaper employees (blue line).  As would be expected there is a very close historical relationship between newspaper advertising and newspaper payrolls (correlation = 0.912).

Just like newspaper advertising revenue, employment levels at US newspapers went into a free-fall decline starting about 2000. A decade later in 2010, newspaper payrolls of 253,500 fell below the 1950 level of 269,000 for the first time, and by 2012 newspaper jobs collapsed even further – to 221,400 industry jobs in December.  Compared to the peak employment level of 455,600 newspaper jobs in 1988 in the pre-Internet era, payroll levels at newspapers today are less than half of that – only 218,500 newspaper jobs in January – the lowest monthly employment level for the newspaper industry since the BLS started tracking those jobs in January 1947.

As I commented before, the dramatic collapse in newspaper ad revenues and payrolls since 2000 has to be one of the most significant Schumpeterian gales of creative destruction in recent years. And it’s not over. One recent special report from IBISWorld on “Dying Industries” identified newspaper publishing as one of ten industries that may be on the verge of extinction in the United States.

8 thoughts on “Chart of the day: Newspaper ad revenue vs. newspaper jobs

  1. When you anger up 60%of your potential readers with palpable bias , it looks ugly . It looks like this . Moreover , as an advertiser , why would you want your product/service ad sitting next to the article that just angered up your customer . You wouldn’t . So go ahead blame it on the internet or whatever . But in any event , couldn’t have happened to a nicer bunch of guys and gals

    • agree — I love it when you get all the newspaper folks talking about their falling status – all the usual suspects are talked about but they never look in the mirror. It will be interesting to see what fills the void.

  2. 1. Newspapers are not supposed to be “objective.” That criteria is for use of public airwaves. If you do not like a newspaper, you can read another one. Is the Wall Street Journal “objective?” I like it, but I know it has its own set of biases.

    2. It is not a happy day in civic America across the country. You think government is weak, incompetent and corrupt now, just wait until they can operate behind curtains.

    3. I do hope local blogs, websites emerge to cover government, expose fraud, corruption, etc. It is not happening. That kind of work eats up the hours. 99 percent of blogs just piggyback off of news covered by real news reporters at old-line publications. Everyone wants to be a columnist, no one wants to be a reporter, read through files, blueprints, documentation.

    If this excellent blog you are racing now—essentially, just a piggyback operation.

  3. “Newspaper employees” includes both journalists and assorted other categories — advertising, circulation, production, for instance — and the “other” category is by far the larger, and more susceptible to productivity improvements due to technology. The paper I worked for (the Rocky Mountain News, now gone) had about 200 journalism employees when I started there in 1997, and about 1,200 in other departments. A new computer system eliminated whole production departments and greatly reduced the number of people needed in advertising.

    While bias in news (I wrote editorials, which are supposed to be opinionated) does affect circulation, and thus advertising revenue, the biggest hit to revenue came in classified ads (jobs, autos, real estate) that migrated to the Internet. Those advertisers probably didn’t much care what the newspaper was publishing, as long as people were answering their ads, since even people who hated the news coverage would buy the paper when they were looking for a used car. Now they go to Craigslist.

    Display advertisers are somewhat more sensitive to content and ad placement, but they are also more affected by general economic conditions.

    A graph for journalism jobs alone would likely have a somewhat similar shape, since loss of ad revenue eventually pushes employment down, but the drop would likely start later. When the Rocky closed in 2009, it had about the same number of journalism employees as in 1997. That makes “bias” an unlikely cause, since it is hardly that recent a phenomenon.

  4. What a happy day!!! 1/2 way done! Looking at how well the existing 220k of professional journalists covered the Kermit Gosnell murders I don’t think we are losing much.

    The money I was spending on job postings and classifieds stays in my pocket maybe to pay for dinner out, a trip to the Dr. or a new printer. Total social wealth increases!

    • I agree with you about the appalling lack of coverage of Gosnell’s trial; but there are not 220,000 “professional journalists”; that’s how many people work for newspapers, but only about 40,000 of them are journalists — which was my point — and of those, only a tiny fraction have jobs that in any way would overlap with covering anything other than local news. Probably a few hundred at most.

      Most newspapers rely on the wire services for all their national and international news. And that’s nothing new; the Associated Press was formed in 1846, pretty much as soon as there existed (telegraph) wires, because local and regional papers had no way to cover — for instance — the Civil War.

      The Rocky back then had a two-paragraph wire-service report on Appomattox, which did not even recognize it was the end of the war.

      If the local papers that go to the school board and city council meetings, file FOIA requests for the records of shady officials, investigate industrial pollution — the meat and potatoes of local journalism — have to downsize or close because some fraction of those few hundred people irresponsibly let their personal support for abortion rights outweigh their news judgment about the importance of the Gosnell case, communities once served by those papers will be much the poorer for it.

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