Part 2_Chinese Businessman Seeking Stake in NY Times? Why?

At one time, Newspaper subscription household penetration exceeded 100% as some households took more than one paper. Today, approximately 1 in 3 homes subscribe to a Newspaper.

The population of the United States has increased almost 2.5 times in its size since a base year of 1940 – yet the circulation of Newspapers today is essentially no larger than it was around the time of the 2nd World War.

In the previous blog, I said newspapers depend upon three levers that manage their P&L.     1. Advertising Revenue 2. Subscriptions 3. Expense Control.  Advertising Revenue and Expense Control are, obviously, to a large extent dependent upon subscription revenue.

Subscription revenue is, also obviously, based on subscribers. Let’s take a look at the U.S. subscriber base for some perspective. Since 1940, 73 years ago, the population of the U.S has grown from 132 million to 316 million, an increase of 139%. The number of households has grown from 35 million to 115 million, or 228%. (Census Bureau)

Estimated circulation for all U.S. Newspapers in 2012 was in the 38 to 43 million range. Compare the 2012 circulation to the 1940’s average daily circulation of 41.4 million. Daily circulation of Newspapers peaked in 1984 at 63.3 million. Circulation in 2012 is running at 35% less than 1984. (Editor and Publisher and Newspaper Association of America)

In 1940, Newspaper circulation actually exceeded 100 % of the available households since many HH’s subscribed to more than one paper. Today, only 1 in 3 HH’s subscribe to a Newspaper.

Equally disturbing for future trends, based on the below chart, every age group has decreased in readership by double digits since 1999.

Readership

Obviously without subscribers, both subscription revenue and advertising revenue fall. Without younger subscribers – the future does not look promising for the Newspaper print industry.

Why would someone want to buy a print based legacy Newspaper? I’ll supply some reasons all in due time.

Look for the next continuing installment Monday.

Comments welcome!

R/L

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