Last month Pew Research Center issued its annual newspaper fact sheet, outlining the state of newspapers in the U.S. In this report, we’ll share their results as well as examples and other research that support the overall trends. As the saying goes, we have good news and bad news. Circulation is down overall, as is advertising revenue and newsroom staff counts, but circulation revenue is up and digital readership and revenue are increasing. Let’s dive a little deeper into the numbers.

 

2016 U.S. Daily Newspaper Circulation

Since 1990, when U.S. daily newspaper circulation was just over 62 million readers, readership has steadily declined. Though online news readership has grown, total U.S. daily newspaper circulation, print and digital combined, has fallen below 40 million. It fell 8 percent over 2015, with print declining more than digital. This is the 28^th consecutive year of circulation declines.

In 2016, weekday circulation was 35 million, and Sunday circulation was 38 million. Weekday print circulation dropped 10 percent, while Sunday circulation dropped 9 percent. Accounting for shifts in reporting, Pew estimates that weekday digital circulation was down 1 percent, and Sunday digital circulation was up 1 percent.

[Sources: Editor & Publisher through 2014, estimates for 2015-16 based on Pew Research Center analysis of Alliance for Audited Media data]

2016 Digital Audiences for Top 50 U.S. Daily Newspapers

Pew Research Center reports that digital circulation is more difficult to determine because many newspaper websites don’t garner enough traffic to be measured by comScore. For this report, Pew measured the top 50 U.S. daily newspapers based on circulation. Forty-nine of the newspapers included were seven-day-a-week newspapers, and the 50^th was the Wall Street Journal which publishes six days a week.

In the fourth quarter of 2016, there were an average of approximately 11.7 million monthly unique visitors, across all devices, for those top 50 newspapers. This represents a 21 percent increase over 2015. Here’s how that data compares for the past three years.

 

 

[Source: comScore Media Matrix, multi-platform, unique visitors, October, November and December 2014, 2015 and 2016]

Readership

Time Spent Reading Newspapers

How much time does an American spend reading a U.S. newspaper? According to Statista, in 2015, the average U.S. consumer spent 17 minutes a day reading newspapers. For 2016, that statistic is estimated to be 15, and by 2018, the average time spent will decrease to 12 minutes per day.

[Source: Statista; Zenith; Various sources (Media Dynamics)]

Newspaper Website Time on Site

According to Pew Research Center, the average number of minutes per visit to the top 50 U.S. daily newspapers is down slightly – about 5 percent – since 2015.

[Source: Source: comScore Media Metrix Multi-platform, unique visitors, October-December 2014, 2015 and 2016]

 

Readership by Device

Let’s take a look at how readers are getting their news. According to Nielsen, in January 2017, slightly more than 50 percent were reading only a print newspaper, 38 percent were accessing newspapers from a combination of devices (print, web and mobile), 6 percent were getting news only from their mobile devices, and 5 percent were getting their news only from the web.

[Source: Nielsen; Marketing Charts; Statista]

Newspaper Economics

Since 2006, revenue from advertising has dropped sharply while circulation is still increasing, though at a snail’s pace. In 2016, total estimated advertising revenue for the newspaper industry was approximately $18 billion, a 10 percent decrease from 2015. Total estimated revenue from circulation was nearly $11 billion, representing a 0.4 percent increase over 2015.

[Source: News Media Alliance, formerly NAA, through 2012; and Pew Research Center analysis of year-end SEC filings of publicly-traded newspaper companies, 2013-2016]

Overall Revenue by Source

This chart from the United States Census Bureau shows a breakdown of estimated revenue of newspaper publishers in the U.S. from 2010 through 2015. In 2010, the largest source of newspaper revenue came from advertising at $20.38 billion. Subscription and sales were next at $8.49 billion. By 2015, those figures had dropped to $14.87 billion for advertising and $7.99 billion for subscription and sales.  

[Source: Statista, U.S. Census Bureau]

Overall Revenue by Media Type

Looking at it a different way, here is how newspaper publishing revenue in the U.S. breaks down by media type for the same time period. In 2010, print newspapers generated $26.97 billion in revenue, while online newspapers generated $1.61 billion in revenue. In 2015, that total had dropped to $18.94 billion, while online newspapers generated $3.5 billion in revenue.

[Source: Statista, U.S. Census Bureau]

Estimated Newspaper Publishing Revenue through 2020

In this chart, PwC estimates newspaper publishing industry revenue for 2017 through 2020, and compares it to annual revenue dating back to 2011.

[Source: PwC, Statista]

Circulation Revenue

In a separate report, Pew Research Center indicates that circulation revenue has been growing steadily. In 2012, circulation revenue was $10.4 billion, and in 2015 and 2016, it was $10.9 billion. Pew points out though that circulation revenue increases are not enough to outpace the declines in overall advertising revenue for some new organizations.

The New York Times is one of the newspapers who has seen circulation revenue increases In its 2016 annual report, The New York Times reported that circulation revenue had increased by 3.4 percent, compared to 2015. The Times said that digital subscription growth and a price increase in home-delivery subscriptions more than offset a decline in the number of print copies sold. Circulation revenue from digital-only subscriptions increased 17 percent in 2016, year-over-year.

The rumors of a Trump bump are true, at least for newspapers like The New York Times. As of December 25, 2016, The Times’ paid digital-only subscriptions totaled 1,853,000, a 46 percent increase over the prior year.

“We saw a significant increase in the number of paid digital-only subscriptions to our news products following the 2016 presidential election,” The Times said. “Given that this increase occurred late in 2016, the revenue generated from these subscriptions is expected to be reflected more fully in 2017.”

Tronc Inc., formerly Tribune Publishing, experienced similar results. In 2016, the company had an 8 percent decline in advertising revenue and a 4 percent decline in total revenue, though circulation revenue rose by 5 percent, according to Pew.

Digital Advertising Revenue

Pew Research Center reports that digital advertising revenue has been steadily increasing since 2011. For 2016, advertising revenue from digital was 29 percent. This represents a 4 percent increase over the prior year.

 

[Source: Pew Research Center analysis of year-end SEC filings of publicly-traded newspaper companies that break out digital advertising revenue for each year.]

Again, The New York Times’ experience supports the data. For 2016, total advertising revenue declined 9.1 percent in 2016 which included a 15.8 percent decrease in print advertising revenue, mostly from display advertising, and a 5 percent increase in digital advertising, primarily from mobile, programmatic buying channels and branded content distribution.

Tronc Inc., formerly Tribune Publishing, experienced similar results. In 2016, the company had an 8 percent decline in advertising revenue and a 4 percent decline in total revenue, though circulation revenue rose by 5 percent.

For further comparison across major newspaper publishers, look at this chart which shows the change in advertising revenue from 2013 to 2016 for Gannett, McClatchy, The New York Times and News Corp.

[Source: Bloomberg, Financial Times and Statista estimates]

Newsroom Jobs

As the newspaper industry struggles to right-size newsrooms and to find the ideal balance between advertising and circulation revenue, newspapers have been laying off staff in droves for years. Here are a few of the layoffs we’ve reported in recent months:

Date reported	Company	# of Jobs Lost
June 21, 2017	Time Inc.	300
June 9, 2017	The New York Times	100
April 28, 2017	ESPN	100
April 5, 2017	BH Media Group	289
	Gannett	16
	The Guardian	Unknown (part of three-year reorganization)
January 10, 2017	Seattle Times	23
November 16, 2016	New York Daily News	Unknown
November 3, 2016	Thomson Reuters	2,000

 

These aren’t the only layoffs, of course, just the ones we’ve covered in the last six months or so. The Wall Street Journal, Gannett and the Sacramento Bee have all announced layoffs since the beginning of the year.

On a positive note, not every organization is cutting jobs. In December 2016, The Washington Post announced it would end the year as “a profitable and growing company,” and as a result, would add a new rapid-response investigative team, a substantial expansion of their video journalism team, additional staff for the breaking-news team, new staff to work on alerts and newsletters, as well as other resources and investments.

According to the American Society of News Editors, the number of full-time daily newspaper journalists has declined from 41,500 in 2010 to 32,900 in 2015, a difference of 8,600.

0)] [Source: Statista, American Society of News Editors, 2010 to 2015]

Insider Take:

So what does this all mean? It means that legacy newspapers as well as new, online digital newspapers are trying to get it right. They know that old models don’t translate well to the digital age, and they must be nimble and agile to navigate changes in the publishing industry. Challenges to overcome include:

• Mergers and acquisitions: Smaller newspapers are getting purchased by larger organizations which almost always means change: content changes, newsroom and organizational changes, and business model shifts, to name a few.
• Competition: While there are fewer newspapers competing for the same print audiences (e.g., Chicago is one of the few two-newspaper cities left), newspapers are competing online for readers, locally, nationally and globally. Competition comes from other news outlets, but also entertainment outlets and anything else that competes for readers’ attention (e.g., Netflix, Facebook, banner ads, etc.)
• Advertising: Advertising presents its own set of challenges with publishers competing against Google and Facebook for ad dollars, as well as ad blocking tools that circumvent display ads that newspapers want to serve their readers.
• Content: In an era where “fake news” is feared, quality content is critical to a newspaper’s success, but it comes with a cost. Newspapers must balance the need for quality content with the need to be first, the need to be right, the need to always have fresh content along with the operational costs of the resources to provide that content and the infrastructure that supports it.
• Business Models: While newspapers are busy juggling those challenges, they must also find the business model that works best for their organization. There is no one-size-fits-all business model. While many organizations have a subscription + advertising revenue model, others like The New York Times are trying other revenue streams with their purchase of The Wirecutter, a product review site where The Times earns affiliate revenue. Experimentation and testing are necessary, but newspapers must be quick about it.

1)]In spite of that, there are newspapers who are doing things well that give the industry a bit of hope. The Washington Post, for example, is growing in spite of the industry’s challenges. It has had its share of growing pains, but with a sizable investment from owner Jeff Bezos, the newspaper has been given permission to try new things, and it seems to be working.

The newspapers, old or new, that are willing to rethink how they do things and to experiment with new ideas are the ones that will succeed as this industry continues to evolve. They will set the tone for the rest, and those that thrive will survive. Those that don’t will either die or be acquired.

In an article called “Editors, Don’t Waste Time Reminiscing on the Glory Days,” in Poynter today by Marty Kaiser, Gregory Favre who has had an extensive career in newspapers and media, summed it up succinctly:

“You don’t have the luxury to reminisce about the glory days of yesterday or wade in the woes of today. If you do, you will miss the opportunity to create tomorrow.”