Intro

For more than two generations, the percentage of Americans reading newspapers has been shrinking. Until 1970 the problem was partially masked by population growth. Overall circulation kept rising. Through the 1980s most of the circulation losses were occurring in afternoon papers. The survivors were stable and financially robust.

In 1990, however, circulation began declining in absolute terms. It became clearer that the young, the next generation of likely readers, were failing to develop a newspaper reading habit. The lack of immigrant readers and the middle class also became more pressing as those populations grew and now several mainstream newspaper companies are now pursuing the Spanish-language market in particular. What's more, some data now suggest that people who began reading newspapers in recent years-including young people-have stopped. Newspapers are now losing readers across age and demographic groups.

Financially, things have been stronger. The surviving newspapers in town have remained the one place where advertisers can reach the most people with a single ad buy. The demographics are also attractive. If you want to reach opinion and business leaders and the most affluent people in a town, newspapers are the way to go. Revenues and profits in the 1990s have grown robustly, even as circulation has declined.

At the same time, newspapers in any given town usually remain the institution, at least as measured by number of reporters and editors and in our content analysis, with the greatest newsgathering capacity, the widest range of coverage, and largest number of stories each day. Newspapers, in other words, are still the biggest watchdog in town.

The financial strategies of the last two decades brought gains, but in retrospect may also have deferred long-term problems. Chasing demographics rather than readership was a lucrative strategy. But the industry invested comparatively little in things like training, research and development or in long-term projects to attract lost or emerging audience groups. If you were making a lot of money, what was the marginal advantage of investing heavily in more newsgathering to chase less affluent readers?

Now the industry faces an important question. Given their history and their relative strengths, do newspapers believe that if they invest in creating new content and even new kinds of newspapers they can attract new readers? Or is this a mature and declining industry where investing in those things would be throwing money away?

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