The June quarter was another rough three months the US newspaper industry, with ad revenues down almost 30% for the second quarter in a row.

But there were some faint signs of a slowing in the rate of fall and a stabilising in some key ad categories, but at very low levels.

The figures again also underline the unreality of Rupert Murdoch’s crusade to get news website users to pay for their viewing.

The problems, especially in the US and the UK where Murdoch operates, is that his websites are second rate, apart from the Wall Street Journal.

As well there have been secular changes in the way products are advertised in both countries, especially classifieds where Murdoch and other companies do not have the same grip on the online world as News and Fairfax Media do in Australia.

So a 29% fall in the June quarter ad revenues was very painful for American newspaper publishers, who, in the main, have no way of filling the holes with revenues from their own online businesses.

Figures on the Newspaper Association of America website tell us that the sad story on advertising revenue continues; national ads down on the second quarter of last year; classifieds down on the second quarter of 2008 as well, retail lower, even online advertising revenue was lower in the quarter, which confirms the depth of the slide in the wider American economy.

The figures show that total online and print advertising fell to $US6.8 billion ($A8.1 billion) from $US9.6 billion in the June quarter of 2008.

Total print advertising fell 30.15% to $US6.1 billion after a 29.7% fall in the first quarter. Total online advertising dropped 15.9% to $US653.1 million from the $US776.5 million in the second quarter of last year and $US696.3 million from the first quarter of 2009.

Classified ads remained the hardest hit, down more than 40% quarter on quarter at $1.4 billion, after a 42.3% drop in the first quarter.

Among the classified categories, car ads fell 42.7% after a 43.4% fall in the first quarter; real estate ads were down 45.8% (45.55% in the first three months of the year) and job ads slumped 66.3% against a first quarter plunge of 66.4%.

Given that the slumps in the first quarter were large, the relatively small movements in the June quarter tells us the slide has at least steadied.

But even though it has been normal for years for advertising to rise over the year, that hasn’t always been the case for more than three years as the evaporation of classifieds to Craigslist and other online outlets, then the credit crunch and recession hit all advertising.

A small positive was the rise in retail and classified from the first quarter to the second, but national and online advertising was lower. Overall, print and online ad revenues were up $US200 million in the second half from the first half. A year ago they rose $US372 million from the first quarter to the June quarter.

The size of the falls will start easing in the third and 4th quarters of this year because revenues fell more sharply in the back half of 2008 than in the first six months after Lehman Brothers and other financial groups got into trouble and recession deepened quickly, especially from October onwards.

But these figures do underline the futility of the campaign by Rupert Murdoch and other newspaper groups to get users of their news websites to pay to look.

The fall in revenues from the second quarter of last year to the June quarter this year was almost $US2.8 billion. Replacing that lost revenue with pay-for-view would require a dramatic boost in viewing levels, and no drainage to free sites.

No wonder Murdoch and son James (with the likes of the Financial Times and others quietly cheering him on) are bagging the likes of the BBC and other groups with broad-based, free news websites. No wonder Murdoch is tempting the likes of the revenue deficient Fairfax Media with the mirage of an online cornucopia. Will the silly folk at Fairfax listen to Rupert’s blandishments? Surely they understand that Murdoch is wrong every time he talks about making money from the internet. Just look at MySpace.

The size of the falls across the first half of 2009 in the US was more than 28.5%. In Australia Fairfax Media had a similar experience suffering a 25% fall in first half sales as ad income dried up.

And in Europe overnight, the giant magazine, TV and publishing group Bertlesmann reported a net loss for the first half of 2009 of 333 million Euros (more than $A500 million) after sales fell 7% and it took impairment charges of a quarter of a billion Euros. Operating profit before interest, taxes, and one-off costs fell 31% to 475 million Euros.

Peter Fray

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