Like newspapers around the world, The Washington Post has seen a drastic decline in the amount of print advertising it is selling. In its last quarter, profit dropped 14 per cent across the company and its many divisions, with the paper itself said to be losing about $60-million a year.
Circulation has also been a problem, with the number of subscribers down an estimated 7 per cent in the first six months of this year to just under 450,000 on weekdays and closer to 650,000 on the weekend. In 2002, The Washington Post's paid weekday circulation averaged almost 768,000 copies.
It has tried to make up for declines in print advertising by charging readers to access its content online. The paywall allows visitors a handful of free articles a month, but then asks them for money if they want to read more. The company hasn't disclosed its subscription totals, but a similar initiative from The New York Times has seen 699,000 activations and helped the publisher stem some of its losses on the print side.
The U.S. newspaper industry has been one of the hardest hit in the world. The Pew Research Centre for Excellence in Journalism estimates that employment in newsrooms across the country has dropped by 30 per cent since 2000. Print advertising fell by $1.8-billion in the last year alone, an 8.5-per-cent drop that took place even as the broader economy began to show signs of growth.
Newspapers have raced to build digital replacements for their once-lucrative print editions, and digital advertising has been expanding to the point that it now accounts for 15 per cent of a typical paper's revenue. But the economics simply don't work for the large papers – Pew believes that for every $15 the papers are losing in print, they are only making up $1 from digital ads.
"Even as volume improves, prices are depressed because of the huge range of places to advertise, now including social sites like Facebook and Twitter," its most recent health-of-the-industry report stated. "Though the great majority of newspaper organizations are profitable on an operating basis, many companies continue to struggle with debt and pension obligations assumed in better times."
Prior to buying the Post, Mr. Bezos casually suggested that readers would never pay for online content because they were used to getting it for free. His tone seems to have softened, as he acknowledges the problems facing the industry.
"The Internet is transforming almost every element of the news business: shortening news cycles, eroding long-reliable revenue sources, and enabling new kinds of competition, some of which bear little or no news-gathering costs," he wrote to Post employees. "We will need to invent, which means we'll need to experiment."