The outlook for newspaper publishers in the U.S.A. is grim. And it’s more than the though economic times. Newspaper revenues are falling more than in any other major medium. eMarketer reports on this historic downslide in both newspaper readership and revenues.

Newspaper Readership

Newspaper circulation continues to deteriorate as people increasingly go online for news that is timelier and free.

Newspaper Revenues

The old newspaper revenue model doesn’t work in today’s society. Advertisers know it, and they are bailing. Newspaper advertising revenues declined 16% in 2008. And over the next 4 years, revenues are expected to decline another 25%. Even online newspapers see declining revenues from classified advertising as people go to Craig’s List and other free alternatives.

 Decreasing ad revenue, combined with the relatively high fixed costs of paper, printing, and distribution spells the demise of this industry as we know it.

What’s the Answer?

“The challenge for newspapers is continuing to make money while they transition to online,” says Carol Krol, senior analyst at eMarketer. “They face the same transition problems that plague other traditional media, such as TV, and so far they have not been able to crack the code.”

According to the “State of the News Media 2008” report published by the Pew Research Center’s Project for Excellence in Journalism, businesses need to decouple news and advertising. “More and more it appears the biggest problem facing traditional media has less to do with where people get information than how to pay for it—the emerging reality is that advertising isn’t migrating online with the consumer.” They’ll need to find new business models beyond advertising.

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