Aug 27, 2019

Obituaries help keep local newspapers afloat

Illustration: Aïda Amer/Axios

Local newspapers still heavily rely on obituary placements for revenue, according to data from local obituary and advertising placement firm Adpay, which is owned by Ancestry.com.

Why it matters: Obits, alongside public notice ads, are one of the last remaining consistent revenue streams that local newspapers rely on, although both are being challenged by the digital age.

By the numbers: In total, about $500 million in total annual revenue comes from obituaries, according to Adpay. There are more than a million paid obituaries created annually. For context, the newspaper market in the U.S. brings in roughly $25 billion in advertising and subscriptions combined.

Obituary rates can vary by market. Some newspapers charge obituaries by the number of characters in a piece, while others charge by the number of lines, square inches, or by word count. Others, particularly in smaller markets, price all obituaries at a flat rate, says Deborah Dreyfuss-Tuchman, Director of Business Development at Adpay.

  • Small markets have an average starting package price of about $99 per obituary. The package price is typically the initial offering presented to the funeral director or private party by the newspaper or ad group that is selling the obituaries on its behalf. Small markets are better at selling photos alongside obituaries than medium and large markets because the cost per photo is cheaper. The average price per photo is $25.
  • Medium markets have an average starting package price of about $139. They tend to successfully up-sell additional features, including things like logos of groups that the deceased person was affiliated with.
  • Large markets have an average starting package price of about $94, which is less than the starting package sizes in smaller markets. Overall, they tend to make more money per obituary due to up-charges.

In total, the average revenue for a single obituary in a large market is $486. The average revenue per obituary in small and medium-sized obituaries tends to be around $318.

  • Our thought bubble: The financial strain on newspapers, in which obituary rates increased over the years, makes it easier for the rich to be remembered.

Between the lines: Companies like Adpay and obituary search company Legacy.com have mostly cornered the market. Legacy claims to publish 1 in every 3 obituaries in America.

Be smart: Small markets end up selling packages that are on average as big as medium-sized markets because families are more likely to purchase additional days for the obituary to print, says Dreyfuss-Tuchman.

  • Families and friends of loved ones are also more likely to buy additional copies of the print paper where the obituary ran and are more likely to buy distribution in nearby weekly papers as a part of their package.
  • Obituary vendors are also raking in cash through up-selling customers. The CEO of Legacy.com said in a 2017 interview with Slate that the company makes just as much money on its website these days as it does selling flowers to grieving families.

Yes, but: Like all print media products, digital and social media is making it easier for some families to skip out on obituaries altogether.

  • Funeral directors are starting to place obituaries for free or at a very low cost on their websites.
  • The rise of free death notices is also impacting the industry. Some newspapers, recognizing the need to start charging for obituaries, started condensing death notices a few years ago down to just a very few short words for free, with the hopes that people would pay extra for fuller obituaries.

What's next: One of the ways local media companies are trying to get more money out of the obituary market is by continuing to allow funeral directors to purchase obituaries in multiple markets within one order entry.

  • This makes it easier for people to get obituaries out to other markets where people may have once lived, retired to, had vacation homes, etc.
  • In total, Adpay says it increased incremental obituary revenue by $19 million last year just by up-selling to more local markets within single orders.

Go deeper: How tech platforms handle a user's death

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