SIC 2711 Newspapers: Publishing, or Publishing and Printing

SIC 2711

This category includes establishments primarily engaged in publishing newspapers or in publishing and printing newspapers. These establishments carry on the various operations necessary for issuing newspapers, including the gathering of news and the preparation of editorials and advertisements but may or may not perform their own printing. Commercial printing is frequently carried out by establishments engaged in publishing and printing newspapers, but even though the commercial printing may be of major importance, such establishments are included in this industry. Establishments not engaged in publishing newspapers but that print newspapers for publishers are classified in SIC 2759: Commercial Printing, Not Elsewhere Classified. News syndicates are classified in SIC 7383: News Syndicates.

NAICS CODE(S)

511110

Newspaper Publishers

INDUSTRY SNAPSHOT

According to the Newspaper Association of America, 52.3 million newspapers were sold every weekday in the United States in 2006, with an additional 53.2 million sold on Sundays. On any average weekday, 51 percent of adult Americans read a newspaper; on an average Sunday, that figure jumps to 58 percent.

Despite these statistics, some analysts view the newspaper industry as doomed. Declining readership among young people, considered to be a predictor of future readership, along with increased Internet viewing among Americans as a whole are blamed for the eventual demise of newspapers. Other experts, however, consider such predictions to be exaggerated and narrowly defined. The newspaper industry isn't dying, they say, it is evolving.

Since its birth, the newspaper history has faced competition from other media. First came radio, followed by television, and then cable television, with its 24-hour news channels. Unlike those competitors, the Internet is not a medium that is wholly distinct from newspapers. On the contrary, newspaper publishers have launched Web sites that can be used in concert with the print version. By 2006, online newspapers reached 54 million people, or about 37 percent of all Americans using the Internet.

Few people claim, however, that the industry is not without its challenges. Indeed, it has been feeling pressure since the late 1980s. Many papers with long histories have been forced to shut down, and many others have reported financial losses. To counteract this crisis, publishers reduced editorial and production staffs through layoffs and hiring freezes, raised newspaper prices and advertising rates, experimented with new layouts, and increased automated processes.

ORGANIZATION AND STRUCTURE

A variety of publications could be called newspapers. The most common format is the gatefold, which is divided into individual sections. Pagination in a gatefold restarts in every section. The other major format, the tabloid, is read like a book or a magazine. Tabloids usually have fewer articles than gatefolds and are paginated without interruption from beginning to end. Traditionally, the content of tabloids has been considered less serious and less comprehensive than that of gatefolds.

Frequency of publication is another variable among newspapers. The papers with the greatest circulation are dailies; most of these issue a denser, more expensive Sunday edition. There are far more weeklies in operation, though their circulation is smaller. The two most common types of weeklies are the community newspaper and the alternative newspaper. The community newspaper highlights local current events such as education, sports, and politics. The alternative newspaper provides coverage of news items and arts-related activities that are often overlooked by the mainstream press. Since advertising provides the bulk of revenue for weeklies, these newspapers are often free.

Advertising

Most newspapers rely on circulation and advertising to finance their operations. Measured in linage, advertising amounts to about 80 percent of an average newspaper's income. Placement of advertisements is a significant factor; the section and page of an ad, as well as its size, will determine its price. Department stores traditionally have been a major source of advertising dollars, filling pages with pictures of their merchandise. Classified advertising is also a reliable and profitable endeavor for newspapers, adding up to 37 percent of total advertising income. This type of advertising is sold by the word.

One recent and controversial development in newspapers is the "advertorial," or paid announcement on the opinion page or in another section where the advertiser expects to gain from its context. Other advertisements of this type consist of multi-page inserts or theme magazines distributed with papers. Paid announcements are labeled as such to avoid confusion; however, many editors feel the ads jeopardize the integrity of the newspaper.

Circulation

Newspapers are sold in vending machines and privately owned newsstands or by subscription, which allows customers to pay a reduced rate per issue and have the paper delivered to their homes or businesses. Newspapers profit from subscribers because they represent guaranteed, consistent sales. In determining a price for newspapers, publishers have to weigh the potential earnings from sales against what readers are willing to pay. If the price is too low, circulation might be healthy, but profits could decline. If the price is too high, circulation could drop.

Expenses

Averaging 50 to 60 percent of total costs, personnel represented the largest expenditure for newspapers. Departments include management, editorial, advertising, circulation, and production. Within the editorial department, the staff is divided according to paper sections, which may include: local and national news, sports, entertainment and the arts, business, opinion, and others, depending on the paper's size and focus.

Newsprint was the second-highest expenditure, averaging one-quarter of total costs. The United States consumes more than one-third of the world's newsprint, most of that going for the nation's newspapers. A dip in newsprint costs can save a newspaper during hard times, and since a failed newspaper means loss of business for the newsprint manufacturer, most offer substantial discounts from list prices. However, publishers such as the New York Times Company and the Tribune Company also own paper mills and consequently suffer when newsprint sells at a low cost. Equipment, such as printing presses and...

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