Newspapers' Progressive Decline

If you happen to be a newspaper publisher today, your world is anything but pretty. That, at least, would seem to be the takeaway from the semi-annual report issued this week by the Audit Bureau of Circulations on newspaper circulation numbers.

There weren't many exceptions to the slipping -- or plummeting in some cases -- readership of U.S. metropolitan newspapers when the six-month results were disclosed. While total circulation dropped by 2.1%, Belo's (NYSE: BLC  ) Dallas Morning News was whacked by a 14.2% lower daily number and a 13.3% reduction on Sunday. And for every Atlanta Journal-Constitution, whose readership base slipped by 2% daily, or close to the average, there was a paper like McClatchy's (NYSE: MNI  ) Miami Herald, which outdid the typical decline with a 5.5% drop during the week and a 10.1% decrease on Sunday.

I could go on, giving you a bevy of lower rates, including Washington Post's (NYSE: WPO  ) lead newspaper of the same name having shed 3.4% of daily readers and 3.2% on Sunday, or Tribune's  (NYSE: TRB  ) Los Angeles Times taking a 4.2% hit on weekdays and losing 4.7% of its Sunday circulation, and I must point out that there were papers that bucked the trend.  News Corp.'s (NYSE: NWS  ) New York Post actually added 7.6% to weekday circulation, along with 6.5% on Sundays. But for the vast majority of papers, the slide appears to be unstoppable.

That's the sobering part, because the most recent numbers, as severe as they were, occurred against comps that had been eased by past declines. The Internet is somewhat justifiably blamed for Americans' rejection of the daily newspaper, but in reality we're simply witnessing a technology-based intensification of a trend that began a half-century ago, when the readership of papers reached its zenith. On that basis, there's no clear end in site.

And while there'll always be newspapers, the publishers' efforts to compensate for the plight of their printed papers by growing their websites as news providers may be a little like cats trying to scurry up Tennessee Williams' proverbial hot tin roof: Their efforts to get traction are commendable, but the likelihood that they'll get over the top also is  questionable.

So Fools, I'd strongly suggest that you avoid even thinking about acquiring shares of companies whose stock in trade is newspaper publishing. There are far better places, even in media, to place your bets.

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Fool contributor David Lee Smith does not own shares in any of the companies mentioned. He welcomes your questions or comments. The Fool has a disclosure policy.


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