During 2009, it was difficult to find anybody inside the newspaper business who was not profoundly depressed about the future of the industry. All the trend lines were downwards. The migration of readers and advertisers towards digital media was already a long-standing headache for the industry. Then came the credit crunch, whose aftermath brought recession, further decline in sales, and a sharp downturn in advertising. The result was industry-wide gloom.

The historic strength of the newspaper business, from an economic point of view, is the fact that it offers two revenue streams, sales and advertising. Both of these have for years been under severe pressure. The story told by circulation figures is so obvious that it’s difficult to find anything interesting to point out about it. A recent OECD report, The Evolution of News and the Internet, makes the picture clear.[*] Between 2004 and 2009, the US newspaper industry lost 34 per cent of its readers; the UK industry lost 22 per cent. Since then, the speed of the downturn has increased. In the last 12 months alone, seven broadsheet titles in the UK have seen their sales decline by more than 10 per cent. In the US, in the first six months of this year, the Chicago Tribune lost 9.8 per cent of its remaining readers, and the Los Angeles Times 14.7 per cent. For anyone who follows the monthly circulation figures, it has been literally years since there was any good news for anyone – the only cheering note has been provided by occasional stunts and one-offs such as the Telegraph’s expenses coup, or (God help us) the recent royal wedding special issues. Apart from that, it’s red ink all the way.

The trends in newspaper advertising have, if anything, been even worse. When circulation goes down, ad revenue goes down too, because the ads are reaching fewer readers and are therefore worth less. Compound this effect with a general advertising recession and the numbers are horrible. In the US, advertising revenue declined for six quarters in a row through mid-2009: in fact, it not only declined, but did so at a rate which increased every quarter. Total advertising dollars fell by 19.9 per cent, on a year-to-year basis, in the quarter to March 2009. Even online advertising fell. And things continued to get worse. In the next quarter, advertising fell by another 28 per cent, year-to-year. In the quarter after that, it fell by another 27 per cent. In the quarter after that, by 23.7 per cent. That slowing-down of the rate of the decline, by industry standards, counts as good news. I’m using US figures because they are easier to get hold of than their British equivalents; the trends here are the same.

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