The Black Magic of Compounded Newspaper Losses

It hasn’t been a good decade for newspapers, but the last month has been especially bad.

It’s not like last year was good. The San Francisco Chronicle‘s ad revenue was down 8 percent last year, and is now about 12 percent below that pace. The Times says the Chronicle is losing about $1 million a week.

In school we learned about “The Magic of Compound Interest.” The magic for newspapers must feel like something straight out of Mordor.

Compounding losses have a way of spiraling. Ad revenue falls, so papers cut back on staff and on the number of pages. The paper is less compelling, so circulation falls. Advertisers won’t pay the high prices for reduced reach, so revenue falls still further.

Add to this the general trend among younger people to not read the newspaper, and on-line alternatives such as eBay, Craigslist and Monster.com that are claiming an ever-larger share of what was formerly a classified advertising monopoly for newspapers, and the situation looks quite bleak.

It’s hard to know which of these trends started first, but Clay Shirky has a good analysis of the monster forces conspiring against the newspaper business in Here Comes Everybody: The Power of Organizing without Organizations. I hope to write a review in the coming days; it’s quite insightful.

It will be difficult for my review to do it justice, though,  and besides, I might not get to it for a while. So you should just go ahead and order it today.

I’ve got a Podcasting curriculum to finish.

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Author: Lee Aase

Married father of six and grandfather of seven, and the Chancellor of SMUG - Social Media University, Global. By day I'm the Director of the Mayo Clinic Social Media Network. Whatever I say here is my personal opinion, and doesn't reflect the positions of my employer.

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