Even With Paywalls, Newspapers Are Still Bleeding Cash

Adding paywalls isn't stopping the decline of the newspaper industry.


With newspaper circulation, and more importantly advertising revenue, continuing to plummet due largely to the rise of online and other alternative sources of information, newspaper companies have responded by adding paywalls requiring people to subscribe in order to read content. Initially, the paywall idea was limited to papers such as The Wall Street Journal and The Financial Times, but in recent years we’ve seen them implemented at The New York Times, The Boston Globe, and The Washington Post. I’ve also noticed paywalls in place at websites for smaller circulation papers around the country. It’s an understandable business decision given the fact that revenue from online advertising is not nearly as large as what newspapers used to make from print advertising, and at least in the case of nationally prominent papers like the Times and the Post it does appear that there is a decently sized subscription base for the websites. For the industry as a whole though, it seems clear that the paywall era isn’t stopping newspaper companies from bleeding cash:

Circulation growth, mobile ads and digital paywalls narrowed newspapers’ losses, but failed to offset declining advertising revenue as newspaper income continued to drop in 2013.

Overall revenue was off 2.6% to $37.6 billion, a sharper drop than the 2% decline from 2012, according to a report from the Newspaper Association of America.

Ad revenue accounted for the entirety of the losses for newspapers. Print ad revenues fell 8.6%, and overall, ad sales for newspapers declined 6.5%.

A 3.7% jump in circulation revenue, including digital paywalls helped alleviate some of the losses.

Digital advertising growth, while not growing as fast as some in the industry have hoped, continued to climb. Mobile ad spending soared 77%, although it still accounts for less than 1% of total newspaper revenue.

Continued revenue declines have forced publishers to make difficult decisions about the viability of the newspaper model. Some outlets have limited their editions, like the Times-Picayune of Louisiana, which now prints just three days a week.

Others have found willing backers in their digital competitors. Digital news outlet Alaska Dispatch recently bought Alaska’s largest newspaper, the Anchorage Daily.

As this chart shows, though, the rise of paywalls hasn’t stemmed the downward trend in ad revenues:

Ad Revenue

Even with the additional revenue generated online, advertising revenue is at roughly the same place it was sixty years ago. And it’s unclear that paywalls are ever going to generate the revenue needed to make up for the loss in advertising. Even in the days when print newspapers were rolling in cash, the revenue from circulation was, for most newspapers, a small part of annual earnings, and it certainly would not be enough to keep the paper running on its own. This is likely even more true when discussing paywalls since subscription rates online are, at least so far, well below those of print newspapers. Given the plethora of  news sources available online, on cable news, and elsewhere, it’s unlikely that large numbers of people are going to start paying for news any time soon.

At some point, of course, the bleeding will stop and we’ll reach a baseline for revenue that will allow news organizations to survive. Perhaps we’ll even see some sort of innovations in the online news delivery business that will make someone very rich (Jeff Bezos seems to have something planned for The Washington Post, for example). Whenever we do reach that point, though, the “newspaper” industry, or whatever it ends up being called in the future, will likely be much smaller than it is today. Large national news organizations, sites devoted to covering large metropolitan areas, and specialty news sites like the Wall Street Journal will likely survive. Sites that specialize in what is coming to be called “hyper local” news will also probably do quite well. A lot of news sites aren’t going to make it, though, or if they do it will be because they were acquired by some larger company. Some will no doubt mourn the loss of the daily “newspaper,” but its loss is just another example of the creative destruction of free market capitalism. Nobody mourns the decline of the candle industry after the invention of the electric light, or the horse and buggy business after Henry Ford made the automobile something more than just a curiosity. In the end, nobody will mourns the loss of a “newspaper” industry that has been going out of style for at least 20 years now.

FILED UNDER: Economics and Business, Media, , , , , , , , , , , , ,
Doug Mataconis
About Doug Mataconis
Doug Mataconis held a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010 and contributed a staggering 16,483 posts before his retirement in January 2020. He passed far too young in July 2021.


  1. Stan says:

    Thursday’s Ann Arbor News is sitting on my living room table. You need a new photo.

  2. Joy says:

    Is it just me or has the quality of the Wall Street Journal declined in this new age of pay walls and “free” content via social media? Their Twitter & Facebook feeds stink.

  3. Tyrell says:

    Any newspaper still around is living on borrowed time. Years ago most schools got bundles of newspapers for free or reduced rates. They would use them for a variety of lessons and subjects. They were used for art classes: cover mats to work on. They could be used for paper mache projects. There was even a special pullout with stories and science articles. I have not seen a paper in the schools in the last few years.

  4. Ron Beasley says:

    @Joy: It declined when it was taken over by Rupert Murdoch.

  5. Ron Beasley says:

    They are looking for new revenue. When my father passed away 12 years ago his obituary in the Oregonian cost $100. When my mother passed away a year ago her obituary cost over $800.

  6. James Joyner says:

    @Stan: But it used to be a daily. Obviously, you know the backstory, since you live there, but here’s the Wikipedia summary:

    Published in Ann Arbor, under various names from 1835 to 2009, The News was part of Booth Newspapers, owned by Advance Publications Inc. The News was published in the afternoons Monday through Friday and in the mornings on weekends and holidays. It published special sections throughout the year.

    The newspaper ended its 174-year print run on July 23, 2009. The publisher blamed the loss of classified advertising revenue (which moved to Craigslist), and noted “the seven-day-a-week print model just is not sustainable [in Ann Arbor, which has] very low home ownership. The population is transient and young. Those demographics have worked against us.”[1]

    The Ann Arbor News was replaced by a Web site, AnnArbor.com, which carried daily news stories and was accompanied by print editions on Thursdays and Sundays.[2][3] Of the 272 people employed as of the announcement of the paper’s closing, “more than a dozen” were hired for AnnArbor.com

    So, a paper by the name “Ann Arbor News” still exists but the paper known as the “Ann Arbor News” all but went away five years ago.

  7. Dave Schuler says:

    Just about every time one of these posts predicting the death of newspapers comes out I seem to need to repeat one important fact. It’s not newspapers that are suffering. It’s newspaper conglomerates, especially publicly-traded debt-financed newspaper conglomerates.

    Small local newspapers that even in the age of Craigslist remain the go-to sites for local advertising, announcements, and news are doing fine. Newspapers that can convince their customers they’re worth paying for, e.g. the Wall Street Journal are doing fine, too.

    Whether there’s a viable commercial niche for a national news daily or, more to the point, a national daily journal of opinion remains to be seen. I don’t think so but maybe they’ll hit upon a business model that works.

    Even that isn’t the big problem. The big problem is newspaper conglomerates that are financed through debt, have stables of stars who earn substantial salaries, and are expected to produce substantial earnings for their stockholders. I think those are as dead as T. rex. They just haven’t stopped twitching yet.

  8. EddieInCA says:

    I’m in my mid 50’s. When I was a kid (8 years old) I used to read the L.A. Herald Examiner and Los Angeles Times every day. Sports section first, funnies, Metro section, then front page. Every day.

    That habit stayed with me through my teens, 20’s, 30’s, and even late 30’s. I traveled alot for business, and over the years, I read the Daily Mail, Daily Standard, Guardian, and Times in London; the Times, Post, and Daily News in NYC: Chicago Tribune, Pittsburgh Post Gazette, Dallas Morning News. Whatever city I was in, I read the local newspaper. Sports, Funnies, Metro, Front Page. Every day.


    That habit continued until about 2000.

    But then the internet happened. I stopped reading “paper” newspapers probably around 2000, and haven’t really ever gone back. I get ALL of my news online and on television. On the few occasions I do look at a newspaper, I’m looking at stories that have already been reported, dissected, analyzed on TV and the Internet. It’s like you’re looking at yesterday’s news – which you are.

    If a story breaks at 2pm, CNN, Fox, MSNBC, NPR all have it on their respective channels by 2:10, By 10pm that night, all of those stations have reported on it for several hours. A newspaper will then have it the following morining. So what’s the point. And it’s not like the newspaper has any more substance or detail to the story.

    Just a matter of time before they all disappear. There is no market for it. Go short on Newspaper stocks.

  9. James Pearce says:

    @Ron Beasley:

    When my father passed away 12 years ago his obituary in the Oregonian cost $100. When my mother passed away a year ago her obituary cost over $800.

    This seems like a perfect example of why “newspapers” are dying.

    Why pay almost a thousand bucks for an obituary in the paper when you can set-up something on the web for free?

    My grandpa passed last month and we paid for a combination print-obituary and web-obituary. The web-obituary is way more interactive and “permanent” than the half-inch of 8pt type we got on page 22F. It was only later that I realized I could have done the same thing on Blogger and paid the Denver Post nothing.

    If I ran a newspaper I would take all content off the web. The website would be an order form. I’d get out of any business (obituaries, movie listings) that other people can do better and expand into businesses where newspapers can really dominate. For example, I’d try and put Groupon out of business instead of the other way around.

    Honestly, I think there are a lot of industries in this country where the companies that dominate are fossils. They’re not lazy exactly; they’re just not enterprising enough. The parent companies of many newspapers are one of those fossils.

  10. rudderpedals says:

    @James Joyner: Just a side reminiscence on the disappearance of an entire category of newspapers, the afternoon papers with their first editions coming out late in the morning and the final home delivered by school kids on bicycles after 3.

  11. stonetools says:

    I hope somebody can figure out a way for newspapers to survive. Original investigate reporting ain’t cheap and it doesn’t just fall out of the sky. There are web-based solutions for just about everything BUT that, and blogging and Twitter aren’t substitutes.

  12. Dave Schuler says:

    @James Pearce:

    Groupon is doing a pretty fair job at puting itself out of business.

  13. James Pearce says:

    Also, paywalls in the age of Heartbleed and data breaches? Now there’s a good idea…..

  14. James Pearce says:

    @Dave Schuler:

    “Groupon is doing a pretty fair job at puting itself out of business.”

    Should be easy pickings, then, for Gannett or News Corp or whomever to pick their corpse clean.

  15. Tyrell says:

    @James Joyner: We used to have a morning and evening paper. The evening edition was closed out probably in the early ’80’s.
    Think about this: many of us grew up to the traditional routine of breakfast and the paper before work and school that gave way years ago to fast food breakfast, breakfast at school (supervised, even handed out by our professional educators at 7:00 am), and protein shakes while driving to work. So another family tradition is gone. I always enjoyed the comics, and checking the latest box scores to see if Mantle hit another homer (later it was Jackson, then Mattingly).

  16. MBunge says:

    Nobody mourns the decline of the candle industry after the invention of the electric light, or the horse and buggy business after Henry Ford made the automobile something more than just a curiosity.

    Those were cases where the replacements were improvements. We’re a good bit into the internet age and most actual news is still done most and best by the traditional sources.


  17. Stan says:

    @MBunge: I’m not sure about this. Back in 2007 there was widespread confustion about health insurance, in part because the traditional press couldn’t be bothered to explain the difference between socialized medicine, as in Great Britain, single payer, as in France, and the Bismarck systems used in Germany and now in the US. I found out this issue only by reading Ezra Klein’s blog posts. Similarly, I learned about the inflated prices of drugs and medical procedures in the US by reading Uwe Reinhardt in the online blog Economix years before the print media took up the topic. When it comes to discussions about policy even our best papers take a back seat compared to the kind of policy analysis one can find on the internet.

  18. stonetools says:


    I might grant you that, but there is no Internet substitute yet for the dogged investigative reporter going through records and developing sources to track down corruption at City Hall, or the international correspondent reporting on the ground from some foreign country. That’s different from analysis or commentary.
    Here is the 2014 Pulitzer Prize winner and finalists :

    For a distinguished example of investigative reporting, using any available journalistic tool, Ten thousand dollars ($10,000).

    Awarded to Chris Hamby of The Center for Public Integrity, Washington, D.C., for his reports on how some lawyers and doctors rigged a system to deny benefits to coal miners stricken with black lung disease, resulting in remedial legislative efforts.


    Also nominated as finalists in this category were Megan Twohey of Reuters for her exposure of an underground Internet marketplace where parents could bypass social welfare regulations and get rid of children they had adopted overseas but no longer wanted, the stories triggering governmental action to curb the practice; and Cynthia Hubert and Phillip Reese of The Sacramento Bee for their probe of a Las Vegas mental hospital that used commercial buses to “dump” more than 1,500 psychiatric patients in 48 states over five years, reporting that brought an end to the practice and the firing of hospital employees.

  19. Dave Schuler says:

    You know, the more I look at the graph that accompanies this post the more I think it supports the comment I made above. Real advertising revenue is about where it was 60 years ago and that supported a lot more daily newspapers that had tremendously larger reporting staffs than the papers we have today.

    What has changed isn’t the revenue. It’s the expectation of how much net revenue should be derived from newspapers.

  20. DrDaveT says:


    And it’s not like the newspaper has any more substance or detail to the story.

    This is the key. You don’t have to be timely if you can be better. That’s why I still read The Economist, but don’t buy newspapers.

  21. DrDaveT says:


    there is no Internet substitute yet for the dogged investigative reporter going through records and developing sources to track down corruption at City Hall, or the international correspondent reporting on the ground from some foreign country

    There’s a non-sequitur there. “Internet” is a distribution mechanism, not an organization or type of organization.

    You listed the 2014 Pulitzer finalists, and only one of them was affiliated with a newspaper. Reuters is an independent agency, and can distribute its products by paper or internet or carrier pigeon or whatever, as they see fit. The Center for Public Integrity is a nonprofit digital news investigative journalism organization — exactly the thing you were claiming doesn’t exist.

  22. bill says:

    @Ron Beasley: i thought it was when the nyt came out of the left wing closet?! if only they had comics…..