Newspaper Economics

Our chapter on mass media looks at the difficult economic condition of the news industry. A new report from the Pew Research Center points to a major reason why newspapers are struggling.

The search for a new revenue model to revive the newspaper industry is making only halting progress, but some individual newspapers are faring much better than the industry overall and may provide signs of a path forward.

A new study, based on analysis of private financial data from 38 newspapers and in-depth interviews with senior executives from 13 companies, found that the papers studied are losing seven dollars in print advertising for every one dollar they are gaining in new digital revenue -- a ratio that shows the pace at which newspapers are shrinking. Executives were candid about the obstacles they faced in making the digital transition, including changing corporate culture and attracting digital sales people to newspapers.

But the 38 case studies also reveal enormous differences among newspapers, which suggest different management approaches can make a significant difference in performance. Some papers were growing both print and digital revenue and others had nearly matched print losses with digital dollars. At the other end of the spectrum, several papers were suffering losses in digital year to year, meaning those papers were falling further and further behind.