As the papers go, so go we

It’s important for television people to keep track of what’s happening in the newspaper business. When they’re hurting, we have tendency to cough and scoff, because after all, they’re competitors for advertising dollars in the community. But their current troubles are OUR troubles too, and we’d better be paying attention.

MediaPost’s Joe Mandese writes in MediaDailyNews today of a Merrill Lynch forecast that newspaper revenues face serious issues.

The report cites consolidation among major newspaper advertisers, including the pending mergers of Sears, Roebuck & Co. and Kmart, as well as the merger of Sprint and Nextel, as major developments that “could take their toll” on newspaper display advertising during 2005.

While the major newspaper circulation scandals appear to have abated, Merrill Lynch projected that circulation revenues would continue to drag due to “secular” reasons. The analysts project that circulation revenue declined about 1.5 percent during the fourth quarter of 2004 and that “circulation pressures” would continue in 2005.

The one bright spot for newspapers, according to the report, is online, but the stock analysts tempered their optimism with a dose of reality.
Most newspaper companies are experiencing strong double-digit gains in online revenues, mostly incorporated in the separate ad categories. While the success is worth noting, the dollar amounts are still small and still present a challenge long term against increased competition, in our view.
As newspapers go, so go we in the broadcasting world. Rather than snickering over their difficulties, we need to be learning from them, for they are ahead of us in the online game.

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