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Credit Suisse’s John Klim Likes Daily Newspapers?!?!?
John Klim, an analyst with Credit Suisse, just released a fairly upbeat report on the daily newspaper industry, claiming that the decimation they have experienced of late, particularly in their classified advertising business, will eventually abate. The report specifically identifies the New York Times and Gannett as the stars within the industry, while the rest, including McClatchy, E.W. Scripps, Lee, Media General, and Belo, were pretty much given a neutral rating. The report does predict that revenues will decline 3.8% in 2008, but that constitutes a smaller decline than the industry has experienced in recent years.
My prediction is that the losses the daily newspapers have experienced, as bad as they’ve been for the past few years, will accelerate even further in 2008. Even if the housing market does recover, the dailies will not recapture the business they lost. Just as employment classifieds failed to recover following the decline in the 2001-2003 recession, real-estate classified advertisers that migrated online or to alternative print vehicles will, for the most part, continue to leverage these more effective, less expensive media channels. As well, the massive cost-cutting that the dailies have undertaken in the past few years has resulted in a lower-quality product that less people are reading, and that degradation will catch up with the dailies in the years ahead. Circulation numbers will continue to decline, customer service will remain poor, and advertising rates will keep going up. Online readership will most likely continue to grow, but the revenue associated with that growth will not increase fast enough to compensate for the continuing decline in the dailies’ print products. All in all, I think 2008 will be an even worse year for the dailies than 2007. And this year was pretty ugly.
[tags]Decline of the Dailies, Death of Newspapers, New York Times, Gannett, McClatchy, Belo, Media General, E.W. Scripps, Real Estate Classifieds, Employment Classifieds, Help-Wanted Advertising, Alternative Publications, Online Advertising, Publishing, Credit Suisse, John Klim[/tags]