Economic Downturn Hits U.S., Mexican Newspapers
North American Newspapers Experiencing Downturn
With advertising revenue becoming harder to procure, it seems that there is a crisis of confidence running through print newspapers in North America, with both U.S. and Mexican papers experiencing severe financial strain.
It has been reported that leading U.S. newspaper executives are scheduled to meet during the last week of June in New York to discuss ways to persuade wavering investors not to take their funds elsewhere.
Of note, Wall Street Journal publisher Dow Jones & Co. Inc. is not committed to be at the meeting, as speculation mounts that it will be bought out by Newscorp Inc.
The entire industry is struggling financially as advertisers and readers flee print for the Internet. Unfortunately, newspapers' online revenue growth, while still substantial, has slowed from its burgeoning rate earlier in the decade. Some observers posit that newspapers have been behind in the overall growth rate for Internet advertising for the last several years.
The majority of newspapers' online revenue comes from an up-sell of print classifieds, and this year real estate classifieds -- an area of enormous growth in 2005 and 2006 -- have fallen sharply, by approximately 15 percent. Automotive and employment classifieds continue to fall at roughly 10 percent a year. Thus, even in a period of deep staff cuts and very affordable newsprint prices, the U.S. paper industry, as a whole, is falling down in earnings, profit margins and earnings per share.
Things appear to be even worse in neighboring Mexico, where we see The Herald Mexico, a daily English-language newspaper published in Mexico City closing down publication on June 1. 'Economic considerations' were cited as the reason given for the paper's closure.
The Herald was established in February 2003, soon after a Mexican-owned English-language daily, The Mexico City News, closed its doors after 53 years of publication. The Herald was a cooperative effort between The Miami Herald of Miami, Florida, and El Universal, a popular Spanish-language newspaper also published in Mexico City.
In a 'good-bye' notice on the main page of the Thursday, May 31 edition, the paper expressed its appreciation to loyal readers and supporters. Addressing the closure, the notice said: "The newspaper industry worldwide is currently going through significant changes. In many instances, financial pressures have forced publications to close down or make draconian changes to stay afloat. The Herald Mexico is no exception."
However, the aforementioned notice kept the possibility open for a possible comeback in the future by stating: "There is a definite need for an English-language publication in Mexico that serves expatriots, English-speaking visitors and Mexicans who either speak or want to perfect their English. We hope this message will not be a permanent adis."
An article in another Mexican newspaper, Guadalajara Reporter, the Herald's management is moving toward locating a new publishing partner.
About the Author
Matthew Paolini is a consultant with Citybook.com for the Atlanta, GA business Yellow Pages division.
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