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NYTimes: Grim News for Newspapers

A New York Times business section story took a particularly grim view of the present state and future prospects of the newspaper industry. Here is just one bitter taste:

In 2007, combined print and online ad revenue fell about 7 percent. In the last six decades, only one other year — 2001, when there was a recession — had a steeper decline, according to the Newspaper Association of America. Adjusted for inflation, 2007 ad revenue was more than 20 percent below its peak in 2000.

Circulation revenue has declined steadily since 2003, and the number of copies sold has been slipping about 2 percent a year. Some of the largest papers — including The San Francisco Chronicle, The Boston Globe and The Los Angeles Times — have lost 30 to 40 percent of their circulation in just a few years.

The long-term shift of advertising to the Internet — especially classified ads for things like jobs, cars and houses — accelerated last year…

Newspaper executives and analysts say that it could take five to 10 years for the industry’s finances to stabilize and that many of the papers that survive will be smaller and will practice less ambitious journalism.

Evening selling the business might not be an option because:

…since last spring, the supply of buyers seems to have dried up. 

None of which bodes well for employees because:

At many papers, the usual way to reduce — the buyout — has been supplemented or even replaced by layoffs.

Here is the only bit of good news, and would be much better if there were a financial model to match it, then even that good news is whipped back into reality by newspaper consultant Ken Doctor:

The paradox is that more people than ever read newspapers, now that some major papers have several times as many readers online as in print. And papers sell more ads than ever, when online ads are included.

But for every dollar advertisers pay to reach a print reader, they pay about 5 cents, on average, to reach an Internet reader. Newspapers need to narrow that gap, but the rise in Internet revenue slowed sharply last year.

“That’s another thing that made 2007 a watershed, the dawning realization that you can’t expect 25 percent annual growth in digital revenue,” Mr. Doctor said. “Nobody knows just when this thing bottoms out, or how far down.”

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