What 2010 will bring newspapers: Bad revenue news, bad bankruptcy news, and maybe a nice tablet

By Martin Langeveld

[Yesterday, we showed how our Martin Langeveld's predictions for 2009 turned out. A few hits, a few misses, but lots of thoughts provoked. Here's his list of what we can expect in 2010. —Josh]

Newspaper ad revenue: At least technically, the recession is over, with GDP growth measured at 2.2 percent in Q3 of 2009 and widely forecast in Q4 to exceed that rate. But newspaper revenue has not followed suit, dropping 28 percent in Q3. McClatchy and the New York Times Company (which both came in at about that level in Q3) hinted recently that Q4 would be better, in the negative low-to-mid 20 percent range. This is not unexpected — in the last few recessions with actual GDP contraction (1990-91 and 2001), newspaper revenue remained in negative territory for at least two quarters after the GDP returned to growth. But the newspaper dip has been bigger each time, and the current slide started (without precedent) a year and a half before the recession did, with a cumulative revenue loss of nearly 50 percent. Newspaper revenue has never grown by much more than 10 percent (year over year) in any one quarter, so no real recovery is likely; this is a permanently downsized industry. My call for revenue by quarter during 2010 is: -11%, -10%, -6%, -2%.

Newspaper online revenue (included in the overall prediction above) will be the only bright spot, breaking even in Q1 and ramping up to 15% growth by Q4.

Newspaper circulation revenue will grow, because publishers are realizing that print is now a niche they can and should charge for, rather than trying to keep marginal subscribers with non-stop discounting. But this means circulation will continue to drop. In 2009, we saw drops of 7.1 percent in the six-month period ending March 31 and 10.6 percent for the period ending Sept. 30. In 2010, we’ll see a losses of at least 7.5% in each period.

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Why the New York Times is crowing about Apple’s marketing embrace

By Zachary M. Seward

I don’t own an iPhone, but I play with one on TV. Apple’s widely praised ads, with their relentless focus on the phone itself, have demonstrated the magic of its mobile device even to those of us who cling to our BlackBerries. Lately, I’ve been made aware that the iPhone can shoot and edit video and level a bookshelf.

But most of all, I know how good the New York Times website looks on the iPhone. Since the first TV spots in 2007, Apple has chosen to demonstrate its mobile browser almost exclusively with NYTimes.com. And that makes the Times very happy indeed.

“The Times recently secured prime product placement in conjunction with the release of Apple’s iPhone 3G S,” crowed Scott Heekin-Canedy, who runs the business side at the Times, in a memo to staffers last week. He listed all of the newspaper’s cameos in Apple’s latest marketing campaign, including: the homepage in a spot demonstrating copy-and-paste, Inauguration Day coverage in the guided tour, and the Times iPhone app in Apple’s “staff picks.” He also noted, “We’re used to illustrate the iPhone as a ‘breakthrough Internet device’ and ‘it works like no other phone: multi-touch.’”

Not long ago, Apple sought to improve its own brand by linking the PowerBook with Mission: Impossible and, more recently, landing its products on The Office, 24, and seemingly all of HBO’s programming short of Deadwood. Legacy newspapers, meanwhile, have generally relied on history, name recognition, and those boxes on every downtown street corner as their most powerful marketing tools.

But the iPhone campaign demonstrates how in a digital age, device makers from Apple to Amazon enjoy immense power to which news organizations may be unavoidably beholden. In his memo, Heekin-Canedy explained, “Not only does this raise awareness of our iPhone app, but it also extends our innovation message through close alignment with one of today’s top brands.”

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