Newspapers turn into rich men's toys

The newspaper industry is looking to wealthy individuals rather than government to bail it out. Newspapers have long been the playthings of wealthy men but a seemingly endless decline in advertising revenues is raising the question of whether private ownership or the shelter of sitting within diversified empires is now the industry's only valid business model. The question is most acute in America's regionally fragmented newspaper industry, where most titles enjoyed monopolies or near- monopolies over classified advertising revenues in the cities they served. A decade of incursions by free online listings and the decline of print readership has destroyed the old business model. According to an analysis published last week by eMarketer, a digital marketing and media research group, US newspaper advertising revenues dropped 16.4 per cent to $37.9bn in 2008. Another $10bn of advertising revenues will disappear by 2012, eMarketer estimates, leaving the industry half the size it was in 2005. The prospect is prompting several newspaper owners to make deep cuts to staffing, attempt to find buyers for lossmaking titles and consider closures.