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Line by line, newspapers’ businesses are falling apart as they shrink and become less efficient for advertisers against the competition and reach of online media. Consider:

* Coupon giant Valassis abandons newspaper distribution for the postal service in three more markets. Says Crains: “The move represents the acknowledgement that newspaper circulation is on the decline and advertising clients want to continue to reach as many people they can in markets with shrinking newspaper coverage.”

This is significant for two reasons: First, consider that a primary reason papers are reducing frequency but maintaining print editions a few days a week is that they can still make money by distributing coupons and circulars. Second, readers value those coupons. I’ve told the story before of my time as Sunday editor of the NY Daily News when we regained coupons after a strike and circulation jumped more than 100,000 – that is, those readers were buying ads, not news. So this becomes a vicious cycle: the more papers shrink, the more value they lose and the more value they lose the more they shrink.

Coupons and circulars are media and they merely use newspapers as distribution vehicles. When they can be distributed online, for free, then the distribution business will fade away.

* Next, newspapers are starting to lose movie listing ads. That advertising used to be content with value – like, say, home and job ads – but now that value can be delivered online, for free – next to a ticket sales opportunity – online. There go a few more dollars and a bit more value.

* Newspapers were smart to start an online company to serve their ghoulish but lucrative line of business in death notices, Legacy.com. But now it has a competitor in Tributes.com. And I wonder how long either of them can continue to convince people that they need an obit service when any web page will do.

None of these, in and of itself, is a killing blow to papers. Just three more dull blows to the kidney.

Source: Newspapers: Three Nails, One Coffin