The news is still bad for newspapers

It’s not cited nearly as often as his most famous proclamation, “the medium is the message,” but another quote from Canadian media prognosticator Marshall McLuhan is proving equally prophetic for the daily newspaper industry. In his 1964 book Understanding Media: The Extensions of Man, McLuhan opined: “The classified ads (and stock-market quotations) are the bedrock […]

It’s not cited nearly as often as his most famous proclamation, “the medium is the message,” but another quote from Canadian media prognosticator Marshall McLuhan is proving equally prophetic for the daily newspaper industry. In his 1964 book Understanding Media: The Extensions of Man, McLuhan opined: “The classified ads (and stock-market quotations) are the bedrock of the press. Should an alternative source of easy access to such diverse daily information be found, the press will fold.”

Nearly 50 years later, the advent of free online classified sites like Craiglist and Kijiji is eliminating one of the daily newspaper industry’s most profitable revenue streams. It is just one of the many factors contributing to what a new research paper calls a “systemic” and “structural” change in the industry.

The Daily Newspaper Circulation Trends, 2000-2013 report from the Canadian company Communications Management Inc. is yet another “doom and gloom” report (is there any other kind?) for the beleaguered newspaper industry.

The report says legacy newspaper publishers have been slow to respond to the structural changes facing their industry, embracing “solutions” (those quotation marks are theirs) such as paywalls and digital-first strategies, or forwarding attempts to become “world news brands.”

“Some of these strategies may work for some newspaper companies some of the time,” the paper states. “But these strategies do not deal in a broad way with the fundamental dilemma facing traditional newspapers in Canada, the U.S. and the U.K.”

The fundamental dilemma is twofold:

• Daily newspapers were once a bundled product with limited competition
• Daily newspapers are becoming an unbundled product with unlimited competition

While focusing primarily on circulation data for Canada, the U.S. and the United Kingdom, the study shows that classified revenues for daily newspapers have shot off a cliff like Wile E. Coyote wearing a pair of rocket-propelled skates. Unlike the cartoon star, they won’t be back for another go.

The report shows that classified revenue for Canadian dailies has fallen precipitously, from more than $800 million in 2006 to less than $300 million today. The 64% drop far exceeds that of paid circulation (29%).

The effect is even more pronounced in the U.S., where classified revenue has plummeted from US$17 billion in 2006 to less than US$5 billion in 2012. In the U.K., classified advertising revenue fell 64% between 2000 and 2012.

The latest report is an update of a 2011 study, which noted that the media industry is nearing the end of a 100-year-old economic model, and predicted that “ultimately, someday, the print product will be gone. And its replacement will not necessarily be the same number of local newspapers simply re-purposed into electronic formats.”

Meanwhile, the report notes that paid newspaper circulation in Canada has fallen from around 45% of Canadian homes in 2000 to about 27% of homes in 2012. Interestingly, while paid circulation in French homes has also fallen, the decline started much later (around 2006) and has been far less precipitious (from about 34% of Francophone households in 2000 to an estimated 27% last year).

The report also notes that format changes such as those adopted by the British papers The Times and The Guardian in the mid-2000s appear to have done little to arrest the ongoing drops in circulation.

The Times’ changed to a compact edition for all editions in 2004, while The Guardian adopted the “Berliner” size – at a reported cost of £80 million – the next year. Both changes produced short-lived circulation increases, but ultimately circulation drops have mirrored those of the industry at large.

Media Articles

30 Under 30 is back with a new name, new outlook

No more age limit! The New Establishment brings 30 Under 30 in a new direction, starting with media professionals.

As Prime Minister, Kellie Leitch would scrap CBC

Tory leadership hopefuls are outlining their views on national broadcaster's future

‘Your Morning’ embarks on first travel partnership

Sponsored giveaway supported by social posts directed at female-skewing audience

KitchenAid embraces social for breast cancer campaign

Annual charitable campaign taps influencers and the social web for the first time

Netflix debates contributions with Canadian Heritage

Netflix remains wary of regulation as some tout 'Anne' and 'Alias Grace' partnerships

Canadians warm up to social commerce

PayPal and Ipsos research shows "Shop Now" buttons are gaining traction

Online ad exchange AppNexus cuts off Breitbart

Popular online ad exchange bans site for violating hate speech policy

Robert Jenkyn is back at Media Experts

Former Microsoft and Globe and Mail exec returns to the agency world

2016 Media Innovation Awards: The complete winners list

All the winning agencies from media's biggest night out!