Shrinking a market, newspaper edition

As noted yesterday, new online software companies may succeed by shrinking the software market (as measured by total revenue). I'm bullish on the rise of blogs and other new media, but I suspect the same will happen here.

Newspaper revenue continues to shrink. Back in August, Alan Mutter ("Reflections of a Newsosaur") noted that Print ad sales hit 10-year low:

After six straight quarters of accelerating declines, newspaper print advertising sales in the first half of this year fell to the lowest level in a decade, according to statistics released today by the Newspaper Association of America [NAA].

Print revenues in the first six months of this year totaled $20.3 billion

That's the bad news. The good news: online ad revenue is up. The really bad news: online revenue accounts for a mere 7% of total revenue. And, it's unlikely to catch up. One third of print revenue comes from "the three principal classified advertising categories -- auto, real estate and recruitment."

Of course these problems aren't new (emphasis added):

here's the back-story: Recruitment advertising, which hit an all-time record of $8.7 billion in the final year of the dot-bomb era, amounted to only $4.7 billion at yearend 2006. Thus, $4 billion in revenues have vaporized in this single category in half a dozen years.

Note that bloggers aren't getting much of this pie. A small slice has gone to a few blog networks that host their own job ads, another portion has gone to Monster.com and the like, but the rest just went away, e.g. to CraigsList (inexpensive jobs ads in a few cities, free in the rest).

One thing bloggers are getting: an engaged audience. While browsing the Newsosaur archives, I came across the following comparison. A link from a Canadian blog named Small Dead Animals brought about 1,000 new visits -- vs. only 1 visit when Mutter was quoted on both Forbes and Business Week. The pattern was repeated 2 weeks later:

Once again, the traffic generated by Small Dead Animals overwhelmed by a substantial margin the combined (but still gratefully appreciated) referrals from [the Wall Street Journal, USA Today, the Chicago Tribune, the San Francisco Chronicle and the Philadelphia Daily News].