The graphic below comes from the University of Michigan’s Professor Mark Perry, who runs a libertarian and market-oriented blog called Carpe Diem.

It shows, essentially, the collapse of the advertising revenue stream in US newspapers. Adjusted for inflation, US newspapers will earn as much from advertising this year as they did in 1950. Note that advertising has historically made up more than half of US newspaper revenues and more than two-thirds of Australian newspaper revenues.

The Australian newspaper industry is not in the same state as the US industry yet, but you wouldn’t want to bet the eventual outcome will be all that diffferent.

I’ve noted this before, but the contraction of the newspaper industry is a huge problem for supporters of the Finkelstein Review’s recommendations for new Australian media regulation. In order to justify its claim that the marketplace of ideas was irrelevant to the Australian media landscape, Finkelstein argued that the press would be a dominant media form for many years to come. From page 101 of the Review:

“The Australian press is in no immediate danger of collapsing. The main media companies appear to be reasonably capable of dealing with the pressures facing them at least over the medium term.”

The Review is not yet a year old, but its intellectual underpinnings are crumbling. Let’s hope the government has noticed.