As more newspapers cut back on print to reduce costs and focus on their websites, a troubling trend has emerged: online advertising sales are stalling. In the first quarter, digital advertising revenue at newspapers rose just 1 percent from a year ago, the fifth consecutive quarter that growth has declined, according to the Newspaper Association of America, a trade organization.
For an industry savaged by the erosion of print advertising dollars, significantly boosting digital revenue is necessary for survival. But the double-digit online growth rates that many newspapers used to enjoy -- and on which their hopes for a prosperous future rest -- could be a thing of the past.
Last week, ratings agency Moody's issued a report calling the U.S. newspaper industry's outlook "negative" because of the "relentless" declines in overall revenue.
"At this point, there is no evidence digital strategies are returning most daily newspapers to positive growth," wrote Moody's senior credit officer John Puchalla. "It is merely a way to moderate revenue declines."
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