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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