Study Finds That Craigslist Has Taken $5 Billion From Newspapers
A recently published study has finalized the long time accusations made by newspaper publishers, targeting Craigslist as the reason why traditional print advertising is on the decline. Craigslist.org is a website that offers buyers, sellers, traders, job hunters,ect a free alternative to paid listings.
For more than a century traditional print based newspapers have always enjoyed being the most preferred destination for lavish ad spends. However it now seems that Craigslist has changed all of this. Research indicates that Craigslist has made significant inroads into the lucrative advertising pie and managed to reduce the exorbitant amount of revenues that traditional newspaper’s managed to generate from their classified advertising pages.
However even before these revelations came out in public, newspaper publishers had all along blamed Craigslist for much of their woes. It seems that Craigslist has managed to steal a march over traditional print media since it offers a reasonably cheap and easy online advertising alternative compared to the old newspaper classifieds. The duo has also claimed in their report that as a result of Craigslist, many local papers who relied heavily on classifieds till date has seen an approximate 20% drop in their ad revenues. The main reason given behind this steep fall is that newspapers are unable to match the rates of Craigslist. Consequently they never managed to recover from the damages inflicted to their finances, resulting in a dip to their sales margin.
However it must be noted that Craig Newmark, the founder of “Craigslist” has been opposing the blame game for many years. Reportedly the study also revealed that Craigslist had managed to inflict maximum damage to the newspaper industry by taking a gigantic margin out of the newspaper’s most profitable revenue stream. It is estimated that Craigslist has drilled a hole to the tune of $5 billion between the years 2000 to 2007 to the newspaper industry.
The renowned academics also claimed in their research that the effect of Craigslist was such that they minimized the rates newspapers charged for displaying advertisements. This has forced increases in their subscription and newsstand prices to help balance their losses. One of the professors concurred with Newmark’s opinion that newspaper was an industry that was slowly evolving after the introduction of radio and television, putting all the blame on Craigslist as the sole reason behind the slow demise of newspaper’s classifieds from the market was not completely justified.