Newspaper ad revenue may plunge 22 percent

U.S. newspaper advertising revenue may plunge 22 percent this year as demand falls, forcing more publications out of business, a Barclays Capital analyst said.
Industrywide newspaper ad revenue will probably drop to $27.1 billion from $34.7 billion last year, including a decline of as much as 25 percent in the first half, Craig Huber of Barclays in New York said today in a research report.
"Over the next three years, a number of daily newspapers in the United States will be shut down given the various pressures on the business," said Huber. "Newspapers are in their worst competitive position in decades, if not ever, to raise advertising rates or even to try to keep them flat."
Five newspaper publishers have sought bankruptcy protection since December, including Chicago's Sun-Times Media Group Inc. yesterday, as readers migrate to the Web, where ad rates are lower. Publishers are halting print editions, firing people and selling assets to cope with plummeting revenue.
Classified sales will drop 35 percent, the biggest decline in any major ad category, followed by a 23 percent plunge in national ads, Huber estimated. Local retail advertising, which accounts for more than half of newspaper revenue, may fall 14 percent, he projected. He also predicted newspapers share of the ad market will fall to 11 percent this year from 12 percent.

Source: Daily Herald