The Tribune Company posted a 38% drop in profits as 4th quarter reports were released this week. The parent company to the LA Times and Chicago Tribune said this week that its fourth-quarter ’05 profit was down 38% from a year earlier on charges related to the shutdown of an LA Times printing facility and 900 job cuts, along with decreased ad revenue at its newspapers and TV stations. In total, sales at Tribune’s television and radio business dropped 11 percent as demand for ads from telecommunications and automobile companies fell.
This is a very scary trend for the world of traditional media. For the past 50 years, Print, TV and Radio have been a goldmine for advertising. With the internet as a major player now, newspaper readership is continuing a downward spiral and finally the advertisers are following suit. Most major newspapers have poured cash into their online services as a way to keep pace with the developing trend. However reading content from these papers online is still free and will stay that way. Newspapers make their money in circulation and in advertisements. With the automobile industry footing the bill.
However, in recent years automobile advertising has increasingly been finding new ways to reach potential customers through online ads, video podcasts, sponsorships and other modern opportunities. If they continue to pull money from newspapers, we might see the end of the print version of an American staple.
If that is the case, look for online newspapers to charge subscription fees for their content. Most offer you a free look at the last two weeks of articles that appeared in print, like the LA Times, NY Times, The Washington Post Boston Globe. However papers like The Wall Street Journal already charge a subscription fee to view their articles. A successful model that might keep the industry alive for a few more years.
However, newspaper giants like Tribune will never make the kind of money they did from the last half of the twentieth century.