Spring 2010 issue of Horizons

Raise Your Expectations CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS

Innovation Required — Newspaper Publishing Industry

The newspaper publishing industry has been hit hard in the recent economy. Newspapers have faced a decline in daily circulation and a decline in advertising revenue. These issues are especially sensitive as information becomes morecommoditized, with increasing amounts of news and information now available from free sources. A recent Pew Institute study found that in 2009, the Internet was the second most used medium for national and international news, surpassing print news for the first time. The good news is that the total newspaper audience is growing with the addition of the online environment. A study by the circulation bureau with Scarborough Research found that the web audience added 8.4 percent to overall readership (after accounting for those who read it both online and in print). So newspaper executives are searching for ways to make their popular Internet sites financially successful. Newspaper websites are among the most popular on the Internet, and their rapidly increasing revenues are helping; unfortunately, to date it has not been enough to offset a decline in overall newspaper profit margins. Looking forward to the next decade of the newspaper industry, it is clear that innovation will be key, and the current efforts within online news media content, online advertising, and streamlining of operations and the related costs will be crucial to their success.

By Maaria Seider, CISA

The newspaper industry is striving to become innovative in creating its strategic identity for the next decade. The threat that newspapers will disappear has occurred many times in history, yet they have continued to survive. First the industry was threatened by radio, then television, then direct mail and now the Internet. All of these entrants were expected to replace newspapers because of the unique characteristics and competitive advantages these up-and-comers offered that newspapers could not — sight, sound, motion, instantaneous access, depth and breadth of coverage. However, in spite of these threats, newspapers remain an important source for news and advertising information and the dominant source of local news and information.

ONLINE NEWS MEDIA

One of the biggest challenges faced by the newspaper industry is circulation. With an increase in online readership (up 16 percent in 2009) and a decline in print subscriptions, the industry is looking to focus more on online content such as mobile media and more interactive applications.

42 u spring 2010 issue