Stop the presses

Is the newspaper industry about to die or experience a revival? The answer may depend on whom you ask and how you define the word newspaper.

The industry is profitable, but for several years it has been on something of a death watch as circulations and ad revenues relentlessly decline. The steady drip of bad news continued on Oct. 30 when the Newspaper Association of America (NAA) reported that average paid circulation fell 2.8 percent from March through September at 770 weekday newspapers nationwide. Sunday papers fared even worse, losing 3.4 percent of their paid subscribers in just those six months. The longer-term numbers are startling: In 1985, newspapers had an average daily circulation of 62.3 million versus 43.7 million today.

Few expect the hemorrhaging to stop or even slow, as younger readers turn to the internet for information and ignore their local papers. But a separate NAA report offered some hope to the industry: Traffic at newspaper websites was up 24 percent in the third quarter of this year over the same period last year, with nearly 57 million people visiting the online versions of newspapers.

The multibillion-dollar question is: Can newspapers make money on the internet as their paper products dwindle? Count Merrill Lynch analyst Lauren Rich Fine as a skeptic. She points out that while online revenue is up at newspapers, it only accounts for 6 percent to 7 percent of total revenue. She thinks it will take 30 years before online newspaper revenue matches revenue from paper editions.

Others are more optimistic, predicting that advertisers will rush to the web when newspaper readership drops below some tipping point. In a speech to the Society of Editors, British publisher and broadcaster Andrew Neil also said newspapers could become smarter about profiting from the online use of their content. "When Google purchased YouTube, the first thing they did was open negotiations with broadcasters to prevent any problems over copyright," he said. "Yet we allow Google to take our content . . . and we do not charge them a penny. It is time for a conversation with Google."

Either way, one prediction is easy to make: If newspapers have a long-term future, it likely won't involve paper and ink.

Balance Sheet

JOBS: October produced a nice surprise for the labor force. The economy added 92,000 jobs and the unemployment rate dipped to 4.4 percent, a five-year low. It was the third month in a row that the Labor Department reported a drop in the unemployment rate, and President Bush on Nov. 3 was quick to claim credit: "Tax cuts have led to a strong and growing economy, and this morning we got more proof of that."

DEBT: Overall consumer borrowing fell at an annual rate of 0.6 percent during September, according to a Nov. 7 report from the Federal Reserve. The bad news: The worst sort of borrowing-borrowing with credit cards-increased 4 percent. A big drop in auto loans accounted for the overall decline.

HOUSING: Former Federal Reserve chairman Alan Greenspan predicted last week that the housing market has seen its largest declines and will soon rebound. "This is not the bottom," he said in a speech, "but the worst is behind us." The speech came as two of the nation's major homebuilders, Toll Brothers Inc. and Beazer Homes USA Inc., reported large declines in contracts for new homes: New orders are down 55 percent at Toll Brothers and 58 percent at Beazer.