Obituaries help local newspapers stay afloat
According to Adpay, a company owned by Ancestry.com, local newspapers still rely heavily on obituary listings.
Why it matters: Obituaries, along with newspaper ads, are one of the last consistent sources of revenue that local newspapers rely on, although both are being challenged by the digital age.
By the numbers: According to Adpay, annual revenue from obituaries is about $500 million dollars. More than one million paid obituaries are created each year. By comparison, the newspaper market in the U.S. generates about $25 billion in advertising and subscriptions combined.
Obituary rates can vary from market to market. Some newspapers calculate obituaries by the number of characters in the piece, while others charge by the number of lines, square inches or word count. Others, especially in smaller markets, set a single price for all obituaries, says Deborah Dreyfuss-Tuchman, director of business development for Adpay.
- In smaller markets , the average initial package price is about $99 per obituary. The package price is usually the initial offer that a newspaper or advertising group selling obituaries on its behalf presents to a funeral director or individual. Smaller markets are better at selling photos along with obituaries than medium and large markets because the cost per photo is cheaper. The average price per photo is $25.
- In middle markets , the average starting price of a package is about $139. They are usually successful in selling additional features, including such things as logos of groups with which the deceased was associated.
- In large markets , the average price of a starter package is about $94, which is less than in smaller markets. In general, they tend to make more money per obituary through surcharges.
In general, the average revenue per obituary in the large market is $486. The average revenue per obituary at small and medium-sized obituary agencies is generally around $318.
- Thought Bubble: The financial burden on newspapers, where obituary rates have risen over the years, makes it easier for the rich to remember.
Between the lines: Companies like Adpay and Legacy.com, an obituary search company, have basically taken over the market. Legacy claims to publish one in three obituaries in America.
Be smart: Smaller markets end up selling packages that are on average as large as medium-sized ones because families are more likely to buy extra days to print an obituary, Dreyfuss-Tuchman says.
- Families and friends of loved ones are also more likely to buy additional copies of the print newspaper in which the obituary was published, and more likely to buy distribution in nearby weekly newspapers as part of the package.
- Obituary vendors also profit by upselling to customers. Legacy.com's CEO told Slate in a 2017 interview that the company makes as much money from its website these days as it does from selling flowers to grieving families.
Yes, but: Like all print publications, digital and social media make it easier for some families to skip obituaries.
- Funeral homes are starting to post obituaries on their websites for free or at a very low cost.
- The rise of free death notices is also having an impact on the industry. Some newspapers, realizing the need to charge for obituaries, began reducing free death notices to a few short words a few years ago, hoping that people would pay for fuller obituaries.
What's Next: One way local media companies are trying to get more money out of the obituary market is to allow funeral homes to buy obituaries in multiple markets as part of a single order.
- This makes it easier to send obituaries to other markets where people may have once lived, retired, had vacation homes, etc.
- Overall, Adpay claims it added $19 million in incremental obituary revenue last year just by increasing sales in more localized markets on a per-order basis.