The daily newspaper industry continues to die before our very eyes. It is battling an expanding array of competitors, from proliferating cable TV outlets to the internet bloggers, seeking the eyeballs of news—hungry readers. None of these competitors has to chop down forests, make paper, put ink on the paper, and deliver a physical product to consumers.

But even more lethally, advertisers, whose revenue generates all the profits (and then some) are deserting the dailies. The department store industry, once the king of retailing, has been losing out to discount stores for almost half a century. Its newspaper advertising is similarly shrinking. Wal—Mart does not see the need of display ads touting the latest fashion arrivals.

Classified advertising, even more lucrative than display ads, is also migrating to the internet, with sites ranging from Monster.com to nonprofit Craig's list, beating the press on the basis of cost and immediacy.

Now, according to Hollywood veteran Nikki Finke, another major advertiser is ditching the dailies:

In a surprising role reversal, Hollywood is about to deliver bad news to the Los Angeles Times and The New York Times and, to a lesser extent, other big—city dailies around the country. Every major movie studio is rethinking its reliably humongous display ad buys in those papers because those newsosaur readers are, to quote one mogul, 'older and elitist' compared to younger, low—brow filmgoers — so it makes no sense to waste the dough.

Wait, it gets worse: I've learned that at least two Hollywood movie studios have decided to drastically cut their newspaper display ads as soon as possible.

This news couldn't occur at a worse time for the LAT and NYT, which both receive the lion's share of those very showy $100,000—plus full—page after full—page movie display ads. At Spring Street, editor Dean Baquet just moved into the power office on Monday, and publisher Jeff Johnson only took over his hot seat on June 1. In Times Square, culture editor Sam Sifton has barely put his stamp on the section since assuming the post in May. Now comes a body blow to their beefed—up cultural coverage.

In response to the recent turf war initiated by his former employer and current national competitor, the NYT, Baquet, a proponent of moving Hollywood coverage onto Page One, has made it his professional mantra to 'own' the beat. The NYT over the past year has underwritten a huge increase in editorial employees and space in its culture sections. But without those big movie ads to foot the bill, both newspapers may not be able to justify the increased pages and bigger overhead they're devoting to arts and entertainment coverage.

I have long maintained, and frequently written, that the nearly simultaneous decision by both the LAT and NYT to increase the space devoted to, and upgrade the quality of reporting on, culture is the direct result of these newspapers' attempts to woo even more Hollywood advertising than the large amount they already receive. For some time now, movie ads are no longer the one bright spot in an otherwise dim display—ad picture for even these newspapers.

Hat tip: Clarice Feldman

Thomas Lifson   8 18 05