The newspaper industry found an extra $6 billion in its couch cushions last year.
That’s not new revenue, unfortunately—just newly measured revenue. But it does help give us a better picture of the overall state of the industry via the latest Newspaper Association of America’s numbers.
It’s still dismal. But it’s not all bad, unlike any of the previous six years. The industry was able to slow its decline in 2012 thanks mainly to the paywall movement, but also thanks to new revenue sources. Industry revenue fell $900 million last year, a 2 percent drop—by far the smallest since 2006.
The numbers reveal that while advertising revenue continues to decline—down 6% in 2012—several other categories of newspaper media revenue are now growing. Circulation revenue grew 5% in 2012, while a host of new revenue sources not tied to conventional advertising and that barely existed a few years ago grew by 8%. These new revenue sources, which include such items as digital consulting for local business and e-commerce transactions, now account for close to one-in-ten dollars coming into newspaper media companies. They are significant enough in scale that NAA has begun to collect detailed data about these revenue categories and track their trajectory year-to-year for the first time.
Those new revenue sources add up to about $2.7 billion, according to the NAA. To put that in perspective, the industry’s total digital advertising was just $3.4 billion last year, and much of that print upsells, not truly digital ads.
You can see that in the numbers. Digital ads were up just 4 percent. But digital-only ads—ones not tied to a print buy—were up 20 percent. It’s unclear how much of the industry’s digital ad revenue is real and how much would disappear if print suddenly went away, but the NAA says just 36 percent of reporting firms’ digital ads were digital-only.
The $2.7 billion from e-commerce and marketing services and the like is good news, but it’s hard to tell how good. Eight percent growth is nice, but it’s hardly gangbusters for a new-ish revenue source. That could be because there are a handful of companies that are ahead of the curve in these niches and the laggards are dragging down the overall average.
The best news come from circulation, which grew $450 million last year, or 5 percent. That was the first increase in nearly a decade, and it’s far higher-margin revenue than, say, marketing services. The question here, as we’ve written, is whether this is a one-time bump in revenue or something more sustainable. Much of this revenue comes from what are effectively print rate increases rather than real digital revenue. You can only milk that cow for so long.
Still, a half a billion dollars is a half a billion dollars, particularly for an industry with the existential problems of this one.
by Ryan Chittum , a former Wall Street Journal reporter, is deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at email@example.com.