newspapersThe Newspaper Association of America has released its report on newspaper revenue in 2012 and estimates that the newspaper media industry brought in $38.6 billion in 2012, a 2 percent drop from 2011’s $39.5 billion.

The NAA’s figures show that ad losses continue to mount – overall ad revenue is down 6 percent – but that newspapers are finding new ways to supplement their income. Thanks to subscription bundling and the advent of more paywalls, newspaper circulation revenue has increased, while there are some bright spots among new revenue sources, namely digital consulting and ecommerce transactions.

“The numbers,” concludes the NAA, “portray an industry that, faced with significant disruption in the last decade, has begun to measurably change its essential revenue model.” That statement is true, and newspapers face no choice. The question is whether or not the industry is changing fast enough and at a great enough scale to prevent yet more newspapers shut-downs and downsizing in the year ahead. We won’t know the answer to that for a few months, so in the meantime here’s what you need to know from today’s report.

Circulation revenue grew, but that growth might not be sustainable

For the first time since 2003, there was overall growth in circulation revenue among the 17 news organizations surveyed. Much of the increase is likely attributable to some paywalls going up for the first time, and all of it has something to do with digital. There are indications, however, that the increase might also be the result of savvier bundling by newspapers. For instance, within that 5 percent gain, bundled digital and print circulation revenue grew by 499 percent, while digital-only revenue grew by 275 percent. Those big spikes suggest a one-time-only kind of effect that could be distorting the circulation gains. In other words, in future years, circulation revenue is unlikely to grow as sharply. Print-only circulation revenue, meanwhile, declined 14 percent.

Advertising revenue dropped by 6 percent

Just in case you were getting too excited about the gains in circulation revenue, don’t forget to look at ad dollars, which make up more than half of all revenues at newspapers. This year, ad revenue dropped by 6 percent – not a pretty figure for an industry that has relied heavily on ads for its entire existence. That figure looks considerably worse when you consider that digital advertising revenue rose by 4 percent in the same period. That means print advertising dropped 9 percent in total for 2012.

The role of digital advertising in newspapers’ future is unclear

Digital ad dollars might have increased by 4 percent across the board, but that growth was anything but steady and its future is anything but certain. Of the 17 companies surveyed, one saw its digital ad revenue slump by double digits, while another saw a gain of 33 percent

Newspapers are finding new ways to monetize

Given the continued decline of advertising revenue in general and a future of mobile advertising that is dominated by Facebook and Google, newspapers have to scramble to survive. That hustle is reflected in a revenue mix that shows more emphasis on digital consulting and ecommerce. There was a 20 percent jump in ecommerce revenue among the 15 companies that reported it. While the NAA includes events among these new revenue streams, it also reports that year-on-year event revenue dropped 9 percent at the seven companies that reported it.

There’s still a worrying over-reliance on print advertising

Despite the NAA’s attempts to herald the not-terrible results of its survey as a moderate success – it notes that overall revenues dropped only 2 percent and that newspapers are “transforming themselves” – the fact remains that print advertising is still what pays most people’s salaries. Print advertising makes up 46 percent of total newspaper revenue, which is down from 49 percent in the year before. The 3 percent change is accounted for by increases in circulation, “new revenues,” and digital advertising. Sadly, the drop in print ad revenue almost hit double digits this year, and it’s not being sufficiently offset by digital revenues, which, while growing, are a much smaller piece of the pie. As Poynter has noted, the ratio of print ad losses to digital ad gains in 2012 was 16 to 1.

From the NAA