Oct 14, 2010

The bad news

Moody's has downgraded its outlook for the newspaper industry to "negative." What does that mean? From Dow Jones:
The ratings agency expects newspaper revenue to decline 5% to 6% in 2010 and drop roughly the same amount next year. It slumped 22% last year amid a plunge in advertising activity. 

In the short term, aggressive increases in home-delivery prices have boosted newspaper publishers' revenue, Moody's said, while advertising-revenue declines have slowed. 

However, "the industry's longer-term secular deterioration is returning to the forefront" as readership continues to erode "as readers embrace free and low-cost content on the web and mobile devices," despite a "slowly growing economy," said Moody's vice president John Puchalla.

1 comment:

Anonymous said...

Why would this be a surprise to anyone? The newspaper business model is dead. It has been for some time. Exactly where will growth come from? What categories of advertising will rebound strongly? How will the stop the slide in circulation? Don't bother to mention the web, they can't compete. Why would the future be bright?