Study finds newspapers face $20 billion shortfall by 2010

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Burlingame, Calif.—The newspaper industry is facing a revenue shortfall of $20 billion by 2010, according to a report released Monday by media research and advisory firm Outsell.

The report, “Deadline With Destiny,” is based on analysis of national industry data. The data tie together the mature businesses of circulation and print advertising and the emerging online ad business to predict revenue trends for the next five years.

The report predicts the decline of paid circulation revenue for print newspapers will speed up as 18-to-39-year-olds continue to migrate online. It also stated that newspapers’ online ad revenue growth rate of about 30% masks the larger problem that online revenue is not replacing lost print revenue fast enough.

Outsell concludes that news organizations must consider lowering their operating margins from an average of 21% to levels more commonly seen in business.

—Matthew Schwartz

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