$5.4 billion

Research has shown that Craigslist cost the newspaper industry $5.4 billion from 2000-2007, and that changes on the classified side of newspaper business led to an increase in subscription prices, a decrease in display advertising rates, and impacted the online strategy of some newspapers.

classified advertising for newspapers

In America Craigslist has pretty much destroyed classified advertising for newspapers (and with newspapers much of their business model).

lost much of their classified advertising

Newspapers lost much of their classified advertising to free services such as Craigslist, and then lost even more ad dollars when marketers pulled back on full-page and half-page print ads for lower-cost and more easily-measured online alternatives.

The study” , titled “Responses to Entry in Multi-Sided Markets: The Impact of Craigslist on Local Newspapers,

The study, titled “Responses to Entry in Multi-Sided Markets: The Impact of Craigslist on Local Newspapers,” explored the impact of Craigslist by analyzing newspaper publisher results over time, focusing on their degree of reliance on classifieds and the timing of Craigslist entry in their market, among other factors.

increased competition

Our empirical context is the U.S. newspaper industry, which has experienced increased competition following the entry of Craigslist, an online provider of classified ads.

the newspaper business

the newspaper business was Craigslist that ruined the newspaper business as a business.

the advertising lifeblood

Craigslist drains the advertising lifeblood from local newspapers, and local libraries reinvent themselves after the web puts the world in your pocket.

about $5 billion in classified advertising revenue

According to a 2012 study by Robert Seamans, an associate professor at New York University’s Stern School of Business, and Feng Zhu, an associate professor at Harvard Business School, newspapers lost about $5 billion in classified advertising revenue to Craigslist from 2000 to 2007.

hammered by the loss of lucrative classified advertising

Newspapers have been hammered by the loss of lucrative classified advertising to free sites like Craigslist, as well as continuing consolidation by large retailers, which leaves fewer retail advertising customers.

destroyed

Once Craigslist has destroyed the newspaper industry by robbing Craigslist of revenue, Google will step in, buy Craigslist, and start charging for classified ads.

not just to realize the classified ad revenues

The newspapers that survive may very well be the ones that find a way to emulate Craigslist, not just to realize the classified ad revenues but also to build brand loyalty (as tenuous as that may be these days) with younger readers who eventually will care about other issues in their local communities.

decline

The one really profound change that has already happened is the decline of metropolitan daily newspapers in the United States, caused by Craiglist and eBay.

destroying power

But for newspapers, who are not in the hookup or rant and rave business, Craigslist is a destroying power.

more than $50 million in classified revenue

In San Francisco, for example, Classified Intelligence Report, an industry newsletter, found that the major newspapers lost more than $50 million in classified revenue in 2004 because of the Craigslist effect.

killing

The point is Craigslist is killing the newspapers by providing free classified advertising that's being underwritten by a monopolist corporation.

sap newspapers’ ad revenues

“Typical analyses blame services like Craigslist, which sap newspapers’ ad revenues, for the traditional news media’s decline”, Be a Better Blogger author Joe Wilcox says.

brink of extinction

Newmark, though, typically denies Craigslist pushed newspapers to the brink of extinction, which is where they most certainly appear to be today.

one of the main challenges an industry encounters

More significantly, Craigslist’s effect on newspapers highlights one of the main challenges an industry encounters when a disruptive technology upsets its market: Not only is the core business broadsided by the fact that the fact's product becomes available at a lower cost, but the task of identifying the emerging competition becomes strategically daunting.

this lucrative revenue stream

With the introduction of cheaper alternatives, like Craigslist, newspapers lost this lucrative revenue stream.

money

Craigslist 'took' money from newspapers and largely returned newspapers to consumers, in the form of lower rates for ads.