newspaper advertising revenue estimates

While newspapers clearly are suffering economically, different sources of newspaper advertising statistics show different extents of decline.  The Newspaper Association of America (NAA) website reports a 27.94% year-on-year decline in newspaper advertising revenue for the third quarter of 2009 (2009 Q3). Data from the U.S. Census Bureau’s Quarterly Services Survey indicate a 14% year-on-year decline in newspaper operating revenue for 2009 Q3. Evidence from the Census Services Survey for 2008 and plausible assumptions suggest a 17% year-on-year 2009 Q3 decline in newspaper advertising revenue. Hence, compared to NAA statistics, reasonable estimates from the Census Services Survey imply a 10 percentage point smaller decline in newspaper advertising revenue in 2009.

The Census Services Survey data seem to me more credible than the NAA statistics.  The NAA has obvious self-interest in newspaper industry statistics.  The NAA does not report its statistical sources and estimation procedures.  The NAA statistics also include no estimates of the reliability of the reported data.  The Census Bureau, in contrast, is an expert government agency.  The Census Services Survey carefully describes the sampling and estimation procedures.  In addition, the Census Services Survey includes variability estimates. The coefficient of variation for the reported 2009 Q3 newspaper operating revenue is 5.6%.  The coefficient of variation for general newspapers’ advertising revenue in 2008 is 3.1%.  The standard error of the 2008/2007 general newspapers’ advertising revenue change is 1.5 percentage points. These statistics suggest that the true decline in newspaper advertising revenue year-to-year 2009 Q3 is probably between roughly 12% and 22%.[1] The NAA figure is most likely an over-estimate.  The NAA’s reporting of that figure to one-hundredths of a percentage point is misleading.

The NAA newspaper advertising figures have been much larger than Census figures, but the NAA figures are dropping rapidly relative to Census figures.  For 2008, the Census Services Survey showed $29.8 billion in newspaper advertising revenue.  The NAA figures showed $37.8 billion in newspaper advertising revenue.[2]  That’s 27% higher than the Census figure.  However, in 2006 the NAA newspaper advertising revenue figure was 45% higher than the Census figure. Some of the decline in NAA reported newspaper advertising may be an artifact of NAA’s advertising accounting / estimation procedure.

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Data: U.S. newspaper advertising trend, with comparison between Census and NAA data (Excel version).  Large dataset of historical advertising expenditure by media.

Notes:

[1] The decline in annual newspaper advertising revenue was 10% from 2007 to 2008.  I’ve assumed a 2.5 percentage-point standard error in the decline in quarterly newspaper advertising revenue 2008 Q3 to 2009 Q3.  That number seems reasonable given the error bounds for the quarterly revenue figure, the annual revenue figure, and the change in annual revenue 2007 to 2008.  Twice the standard error, or 5 percentage points, defines a 95% confidence interval.  I’ve formed that interval around the point estimate of a 17% revenue decline.

[2]  That’s the NAA figure for print and online advertising . Since the Census figures are establishment-based, newspapers online advertising revenue are included in the Census figures.  Hence the NAA print and online total is the relevant comparison.

public utility tariffs in an online, semantic web

Public utility tariffs are typically established through a formal administrative process that legally certifies rates (prices) and makes them public.  Hence, these prices differ significantly from commercial prices established without any specific public administrative process. The difference between public utility tariffs and commercially established prices is under-appreciated.[1]  The web and technologies for semantic mark-up can make public utility tariffs a valuable, open-data product of the public administrative process.

Tariff regulation has tended to focus on rate-making principals.  In the U.S., the Interstate Commerce Act of 1887 addressed railroad “common carrier” rates.  The Act required that railroad rates be “reasonable and just” and prohibited giving “undue or unreasonable preference or advantage” to any railroad customer or type of railroad traffic.  Similar rules have been extended to a variety of services, including some in the water, energy, trucking, and communications sectors.  What exactly these rules mean is typically a matter of contentious administrative and political debates.  Those most willing to invest time, money, and effort into these debates have been businesses with significant financial interests in tariff decisions and politicians and interest groups who see opportunities for scoring news-marketable symbolic victories.

The Interstate Commerce Act, however, was also quite concerned with making tariffs public. Section 6 of the Act required a plain statement of rates and conditions to be made available for public inspection.  Ten days’ public notice was required for an increase in rates.  Reductions in rates could be made immediately, but they also were required to be publicly posted immediately.  The Act’s requirements for making rates public were quite specific in terms of the communications technology of the time:

Such schedules shall be plainly printed in large type, of at least the size of ordinary pica, and copies for the use of the public shall be kept in every depot or station upon any such railroad, in such places and in such form that they can be conveniently inspected.

The Act also gave the newly formed Interstate Commerce Commission broad powers to adopt new communication technologies:

said Commission shall from time to time prescribe the measure of publicity which shall be given to such rates, fares, and charges, or to such part of them as it may deem it practicable for such common carriers to publish, and the places in which they shall be published

In response to the Act, some common carriers used what were called “midnight tariffs”. The basic idea was to tip-off a favored customer about an obscure reduction in a tariff just before the old tariff was re-enacted.  Thus no other customer but the informationally favored customer got the lowered tariff rate.  In response to such abuse, Congress amended the Interstate Commerce Act to require 30 days’ notice for a tariff increase or decrease. [2]

Tariffs are now typically available on the web in forms that humans and data-gathering software applications cannot readily read.  British Telecom, for instance, has online Price Lists that presents a huge amount of relatively unstructured information.  Only a well-informed human could easily make sense of this information. In the U.S., tariffs filed at the Federal Communications Commission (FCC) are available through the FCC’s Electronic Tariff Filing System. Tariffs in that system are pdf documents describing rates and terms. Only a well-informed human could easily make sense of this information. Tariffs are not generally available in ways that make tariff information most useful to the widest range of persons and applications, given up-to-date communications technologies.

Presenting tariff data with standard mark-up technologies and vocabularies would be a valuable contribution to open-data ecologies.  Smart-grid systems for more efficient energy consumption need structured, software-interpretable price data.  Efficient use of communications networks requires not just standardized, real-time propagation of technical routing tables but also standardized, real-time propagation of prices associated with different routes and services. More generally, requiring that tariffs be public knowledge openly available to applications would discipline and leverage administrative and legal resources used in the public process of establishing tariffs.  Tariffs under such a process would look nothing like current tariffs.

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Notes:

[1] In British English, tariff is more or less synonymous with price.  The relevant distinction is between prices certified through a public administrative process and prices not certified through such a process.

[2] Amendment enacted on June 29, 1906.

calls per phone grew across the Great Depression

Despite the Great Depression traumatically beginning in 1929, calls per telephone grew 1%  in the U.S. from 1927 to 1932.  Across this period, gross domestic product (GDP) fell 39%, and urban prices fell 21%. Since telephone rates are regulated, they tend to be nominally sticky.  Hence the real price of telephone service almost surely rose from 1927 to 1932.  Nonetheless, the number of telephones in service fell only 6%.  Calls, most of which are not charged per call, fell 5%. [1]

The relative stability of telephone use during the Great Depression probably didn’t come from phones then being used for relatively important communication.  While only about a third of U.S. households had a telephone in the 1920s, calls per phone per day in 1927 (4.7) was only slightly below calls per phone per day in 1977 (5.1).  The share of business phones in 1927 (34%) was only slightly higher than in 1977 (25%).[2] Phone use was quite similar in 1927, 1932, and 1977. The increase in telephone calls from 1927 to 1977 came mainly from smaller households and more phones per household. Access to a phone, not the importance of calls, seems to have determined call volumes.[3]

Communication shouldn’t be expected to contract with economic contractions.  After all, misery loves company.  Bad times are a good stimulus for conversation. Complaining has unlimited possibilities for growth.  Communication beats depression.

Data: U.S. telephone call volumes, 1912-2007 (Excel version).

Notes:

[1] All changes are from 1927 to 1932. Data availability determined these years; they are years of telephone censuses.

[2] The number of business telephones fell less than the number of residential telephones from 1927 to 1932.  In the Bell System, the number of business telephones actually rose 2.3% from 1927 to 1932. This evidence points to the economic importance of telephone service to businesses.  So too does more uniform business adoption of telephone service.

[3] The number of telephones per telephone household rose from about 1.15 in 1927 to 1.81 in 1977. In addition, average household size fell from 4.01 persons per household in 1930 to 2.75 persons per household in 1980.

ancient Roman pantomime: Bathyllus, Pylades, and other celebrities

Among ancient Roman mass media, pantomime had an attention share probably only slightly smaller than chariot racing and gladiator fights. Ancient Roman pantomimes presented emotionally fraught mythic episodes through the bodily movement of a mute, solo dancer. Pantomime rapidly gained attention beginning about 23 BGC under the reign of Augustus. Two pantomime dancers — Bathyllus of Alexandria and Pylades of Cilicia — quickly became celebrities. Bathyllus favored lascivious burlesques and comedy. Pylades specialized in solemn tragic scenes. Both presented rapidly in succession different passions and characters. They attracted huge numbers of enthusiastic spectators.

Just as many men keenly follow and support football teams while paying little attention to important public issues, so too did pantomime fans. Rivalries between Bathyllus’ and Pylades’ fans caused riots in Rome and prompted Augustus to rebuke Pylades. Responding from the standpoint of a political adviser to Augustus, Pylades reportedly replied: “You are ungrateful, Master. Let the people kill their time with us!”[*] Put differently, Pylades urged Augustus to recognize the political value of having the population absorbed in entertainment.

Recently, a street-leading news source has put forward pantomime in a protest over the suppression of modern expression. This pantomime redivivus blurs the classically contentious boundary between pantomime burlesque and rhythmic tragic movement. It can be seen worldwide from now to at least the end of YouTube as it currently exists. That’s a gigantic circus, a huge colosseum. Most of the seats undoubtedly will be empty. This isn’t pantomime in Roman mass media.

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[*] Reported in Cassius Dio, Roman History 54.17.4.  The above translation is from Beacham, Richard C. 1999. Spectacle entertainments in early imperial Rome. London: Yale University Press, p. 145.