As quoted in The ClickZ Network, a report from BIA Financial Network and Borrell Associates predicts weak growth in newspapers’ online revenues over the next few years.

According to the report, online revenues for newspaper companies such as Morris Communications, McClatchy, Tribune and Gannett will go from constituting 5-10 percent of gross revenues to reach just 7-13 percent in 2011. Online revenue for publishers with larger websites, including New York Times Company and Tribune, will reach only around 12 percent by 2011.

This pales in comparison to the online operations of AT&T Yellow Pages, Yellow Book USA and White Directories, where online revenues are expected to comprise over 15 percent of gross revenues, and exceed 20 percent by 2011.

According to Borrell Associates CEO Gordon Borrell the slower growth rates are attributable to newspapers’ reliance on revenue from classified and display advertising, both of which are declining in light of better advertising alternatives.

As quoted in The ClickZ Network, the report says that “…nearly one-third of their Web clients are local real estate companies
and automobile dealerships, two categories of retailers that are cutting back their overall advertising outlays.”

But what should be of most concern to newspapers is that overall newspaper revenues are declining. In other words, online ad sales
are growing only marginally to become a bigger piece of a shrinking pie.

Source: Kate Kaye, “Newspapers Losing Ground to Other Local Media”, The ClickZ Network, September 17, 2008

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