A substantial part of the Hispanic digital and print media industry revolves around community content and media. (Hispanic) community media has had a much stronger performance than other media types over the last few years.
IBISWorld just published a new research report on the Community Newspaper Publishing industry which expects overall worldwide industry revenues to decline by 3,5%. However, IBIS World is much more upbeat when it comes to the Hispanic market. Media analyst Agate Kaczanowska tells Portada that Hispanic purchasing power is forecast to grow 48.1% to $1.6 trillion over the next five years All this income has to go somewhere, and companies across all sectors are eager to claim a piece of the pie. Consequently, Community Newspaper Publishers are eager to attract affluent/concentrated Hispanic audiences in order to garner their attention – and the associated advertising revenue.
IBIS World expects that communities with majority Hispanic populations are most likely to have a local paper that is centered around a Latino culture. The largest of these communities (with over 25,000 people) are located in Arizona, California, Florida, Illinois, Indiana, Massachusets, Minnesota, New York and Washington. In particular, California, Florida, New Jersey and New York have majority Hispanic communities with populations greater than 100,000 people.
Below are some highlights of the general (non Hispanic report)
Community Newspapers continue to be profitable because they reach an audience that small, local businesses are targeting in a traditional manner. However, recently developed digital media technologies (such as Facebook ads) now compete in this space. These technologies enable small businesses to target even more specific demographics (e.g. local search), which is projected to hurt community newspaper revenue and profitability over the next five years. Average industry profit (earnings before interest and taxes) is projected to fall to 7.0% in 2016 from 7.4% of revenue in 2011. Profit will remain well below 2006 levels of 11.8% of revenue because many advertisers are anticipated to shift away from print to digital advertising.
In order to compete with digital media, community newspaper publishers will need to continue investing in emerging technologies, while cutting costs to stay profitable.
This trend will likely promote further consolidation in the industry, as publishers with significant financial resources will be best positioned to develop and adapt this technology. Consequently, IBISWorld forecasts that the number of firms operating in the industry will decline in the next five years at a 4.9% annualized rate to 2,251 in 2016.
Rising input costs, along with opportunities provided by emerging technologies, will push even more publishers to pursue online-only models. The price of paper is forecast to grow at a 1.5% annualized rate over the five years to 2016, after starting at a high point in 2011. Likewise, the price of mailing newspapers is anticipated to increase as the US Postal Service (USPS) continues to struggle and imposes additional rules and fees. As a result, the number of industry establishments is projected to decline at an average of 2.6% per year to 5,972 locations in 2016.
