For the last several years, I’ve been regularly posting charts like the one above showing the history of US newspaper advertising revenue back to 1950, based on data from the Newspaper Association of America. Those charts have been noteworthy for several reasons.
First, more than any of the hundreds of charts and graphs that I’ve created and posted on Carpe Diem over the last seven years, the newspaper ad revenue charts have received the most attention by far. Those charts have been featured on so many other blogs and websites that a recent Reuters article referred to a recent version as a “much-reproduced chart.” If you do a Google image search for “newspaper ad revenue,” you’ll see many versions of the CD chart above. I hope this is a testament to how powerful and compelling the graphical representation of data can be!
Second, it’s possible that the attention the ad revenue charts were generating on the Internet may have contributed to the decision by the Newspaper Association of America (NAA) in 2013 to suddenly stop its long-standing practice of reporting quarterly advertising revenue data, and switch to releasing only annual data (not yet available from NAA for 2014, but available here from BIA/Kelsey). In a 2013 interview, NAA CEO Caroline Little was quoted as saying that she and the organization’s board decided it was “time to stop beating themselves up four times a year with the negative numbers.”
The updated chart above shows annual data from 1950 to 2014 in inflation-adjusted (2014) dollars. The blue line represents total annual print newspaper advertising revenue (for the three categories national, retail, and classified), and appear in the chart as billions of constant 2014 dollars. Newspaper print advertising revenues of just $16.4 billion in 2014 fell to the lowest level of print advertising since the NAA started tracking industry data in 1950. In constant 2014 dollars, advertising revenues last year were $3.6 billion (and 18%) below the $20 billion spent in 1950, 62 years ago. In fact, inflation-adjusted print advertising revenues have been below the 1950 level for the last three years: 2012 ($19.5 billion), 2013 ($17.6 billion) and 2014 ($19.5 billion).
The decline in print newspaper advertising to a 64-year low in 2014 is pretty amazing by itself, but the sharp decline in recent years is stunning. Newspaper print advertising revenues decreased more than 57% in just the last six years, from $38.15 billion in 2008 to only $16.4 billion last year; and by more than 75% from the $67 billion peak in 2000 (see chart).
Here’s another perspective: It took a half century for annual newspaper print ad revenue to gradually increase from $20 billion in 1950 (adjusted for inflation in 2014 dollars) to $67 billion in 2000, and then it took only 12 years to go from $65.8 billion in ad revenues back to less than $20 billion in 2012, before falling even further in 2013 and 2014.
Even when revenues from digital advertising are added to print ad revenue (see red line in chart), the combined revenues for print and digital advertising last year were still only $19.9 billion, which was 2.5% below the 1950 level of $20.4 billion. Last year was noteworthy because it marked the first year in history that total newspaper revenue (print + digital) fell below the 1950 level in inflation-adjusted dollars.
Economic Lesson: The dramatic decline in newspaper ad revenues since 2000 has to be one of the most significant and profound Schumpeterian gales of creative destruction in the last decade, maybe in a generation. And it’s not even close to being over. A 2011 IBISWorld report on “Dying Industries” identified newspaper publishing as one of ten industries that may be on the verge of extinction in the United States.
from AEI » Latest Content http://ift.tt/1JbT7AO
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