Revenues, Readership Grow As US Dailies Show New Life

STOP the presses! Read all about it! The United States newspaper industry - hard hit by the recent recession in lost advertising revenues and sagging readership - is suddenly showing new signs of life.

Advertising lineage is up and modest circulation gains are evident at a number of major US dailies. Many papers are hiring new staff members for the first time in several years. In fact, some major chains are now ``in possession of such significant cash flows'' that they are having a difficult time determining what they should do with their new found wealth, says Melissa Cook, a newspaper analyst with investment house Prudential Securities Inc.

``Most of the chains are now diversifying into other media,'' particularly new innovations involving the electronic and computer-based communications highway of the future, Ms. Cook says. But ``the major newspaper companies feel very strongly about the importance'' of print journalism; ``they are determined'' that there will always be a place and role for newspapers, she says.

``Recent gains in advertising have been a long-time coming,'' says Fred Danzig, editor of Advertising Age, a trade paper. ``Still, it's not yet clear that newspaper advertising will ever return to the [high] levels of the late 1980s; but gains are evident.''

Both national advertising and classified advertising have been growing in terms of lineage - the number of lines of advertising space sold. Total advertising dollar revenue is also up. ``Our feeling is that 1994 will be a good year for the newspaper industry,'' says Miles Groves, who oversees economic analysis for the Newspaper Association of America (NAA). Total advertising and circulation revenues for the industry reached $41 billion in 1993, up from $39.5 billion in 1992. Many observers expect 1994 totals to surpass last year's results. The NAA is forecasting a 6 percent increase this year in advertising revenue, compared to a 4 percent actual increase last year.

While the number of US daily papers is down sharply from the period immediately following World War II, many of the survivors are believed to be financially stronger than ever. There are currently about 1,556 daily papers in the US, down from 1,772 papers in 1950, says Ardis Pruess, who follows circulation trends for the NAA.

Circulation has barely grown since 1950, despite an increase in the overall US population of about 100 million people. Total daily circulation is now more than 59 million, compared to 54 million in 1950.

But the industry's success story occurs on Sundays. There are now about 889 Sunday papers, compared to 548 Sunday papers in 1950. Moreover, Sunday circulation has shot from 47 million papers in 1950 to 63 million papers today.

In addition, scores of foreign language dailies have been established to provide information to the millions of immigrants who arrived in the US during recent years. In New York City alone, there are about 10 foreign language papers, several of which are believed to have circulations equal to the New York Post. The Post had a 1993 circulation of around 400,000, according to the Audit Bureau of Circulation, which tracks newspaper numbers.

DESPITE recent economic gains, the newspaper industry needs to be more innovative, says Mitchell Stephens, chairman of the department of journalism at New York University and author of ``A History of News.''

Younger Americans, who now have a diverse assortment of communications options to choose from, including cable television, video games, home computers and VCRs, are turning away from newspapers, Mr. Stephens says. And so too are many adults, including minorities, who often feel excluded from mainstream coverage.

While Mr. Stephens says newspapers ``will always be around,'' editors and publishers would be remiss in forgetting history. Many once-traditional communications channels have largely disappeared, he notes, including ``town criers, written telegrams, and newsreels.'' To survive, newspapers must stay at the forefront of technology, while doing ``a much better job'' of providing essential information.