What: Newspapers generated an estimated US $179 billion in circulation and advertising revenue in 2014 — larger than the book publishing, music or film industries. 92 billion dollars came from print and digital circulation, while 87 billion came from advertising, a survey released by the Worlds Association of Newspapers (WAN-IFRA) said.
Why it matters: The shift in the relative weight of newspaper circ. revenues vs. advertising is causing newspapers globally more to focus on the end consumer audience rather than on the advertising community (agencies and brands). There are differences between markets: In Northern European markets, for instance, ad revenues have a much lower share in total revenues than in the U.S. Hispanic market and Latin America.
Global newspaper circulation revenues are larger than newspaper advertising revenues for the first time this century, according to the annual World Press Trends survey released Monday by the World Association of Newspapers and News Publishers (WAN-IFRA). “The basic assumption of the news business model — the subsidy that advertisers have long provided to news content — is gone,” said Larry Kilman, Secretary General of WAN-IFRA, who presented the survey at the 67th World Newspaper Congress, 22nd World Editors Forum and 25th World Advertising Forum in Washington, D.C. “We can freely say that audiences have become publishers’ biggest source of revenue.”
This is a seismic shift from a strong business-to-business emphasis – publishers to advertisers – to a growing business-to-consumer emphasis, publishers to audiences.
“This is a seismic shift from a strong business-to-business emphasis – publishers to advertisers – to a growing business-to-consumer emphasis, publishers to audiences,” said Mr. Kilman.
Throughout the 20th century, advertising brought up to 80 per cent of revenues in some markets. The ratio varies from market to market: in some European and Asian markets, advertising might bring 40 per cent of revenues. In the U.S. Hispanic market and most Latin American countries that ratio historically has been tilted more heavily towards advertising vs. circulation revenue. Digital pay-walls are included in so-called circulation revenues.
Stable Circ. Revenues
The survey showed that newspaper advertising revenues are falling nearly everywhere, while circulation revenues are relatively stable.
“Print used to be one of few traditional marketing channels and often the one that was the most ubiquitous for branding and logical choice for all marketers,” said Mr. Kilman. “This direct relationship of mutual dependence no longer exists. Advertisers nowadays have more than 60 different advertising media channels available to them.”
“However, in 2015 it is clear that the story of the newspaper industry is not one of doom and gloom and decline. Newspapers around the world are successfully proving their value to advertisers despite booming competition. They are discovering new markets and new business models that are today as pertinent to news production as advertising and circulation revenues. From print newspaper businesses, they have transformed into true multiplatform news media businesses.”
Paid digital circulation increased by 56% in 2014.
Though newspapers are now ubiquitous on all media platforms, the measure of their reach and influence continues to be mired in the 20th century, largely relying on print circulation and a variety of separate, non-standardized measures of digital reach. The challenge for the industry is to measure reach of newspaper content on all platforms with new metrics.
The World Press Trends survey includes data from more than 70 countries, accounting for more than 90 per cent of the global industry’s value. The data is compiled through an enormous undertaking by dozens of national newspaper and news media associations and generous support from global data suppliers: Zenith Optimedia, IPSOS, ComScore, the Pew Research Center, RAM, and the ITU.
Print Circulation Rises in East, Sets in West, Digital Circulation Grows
— Around 2.7 billion people around the world read newspapers in print and more than 770 million on desktop digital platforms. However, there is increasing evidence — from countries with sophisticated and robust metrics — that print and digital combined are increasing audiences for newspapers globally. Data from Australia, for example, shows that nearly 86 per cent of all adults read newspapers on some platform. In the United Kingdom the figure is 83 per cent. And in Chile, in is nearly 82 per cent.
— Print circulation increased +6.4 per cent globally in 2014 from a year earlier and shows a five year growth of +16.5 per cent. This is the largely the result of circulation increases in India and elsewhere in Asia; the newspaper business in India is still the healthiest print newspaper industry in the world. Updated Indian figures have significantly affected the global picture and they partly come from a growing number of publications in India.
— Circulation rose +9.8 per cent in Asia in 2014 from a year earlier, +1.2 in the Middle East and Africa and +0.6 in Latin America; it fell -1.3 per cent in North America, -4.5 per cent in Europe and -5.3 per cent in Australia and Oceania. Over five years, newspaper circulation rose +32.7 per cent in Asia, +3.7 per cent in the Middle East and Africa and around +3 per cent in Latin America; it fell -8.8 per cent in North America; -21.3 per cent in Europe and -22.3 per cent in Australia and Oceania.
— In mature markets, newspapers are adopting strategies to make more money from fewer subscribers. These include cover price increases and lowering production costs by reducing the frequency of printing. But these practices risks alienating some segments of their readership in exchange for growth in revenues.
— Paid digital circulation increased 56 per cent in 2014 and rose more than 1,420 per cent over the last five years, according to PwC. One in 10 people in a Reuters Institute Digital News Report survey of 10 countries said they now pay for digital content. That ranges from 22 per cent in Brazil to 7 percent in the United Kingdom.
Print Still Pays
— Globally, more than 93 per cent of all newspaper revenues still come from print, and print will continue to be a major source of revenue for many years to come. At the same time, newspapers around the world are investing efforts and are increasingly innovative in turning the business model from two-dimensional to multi-dimensional.
— While digital advertising represents a small part of overall newspaper revenue, it continues to grow significantly, increasing 8 per cent in 2014 and 59 per cent over five years, according to PricewaterhouseCoopers. But the main benefactors of digital ad spending continue to be social media and technology companies. Google takes the biggest share, with 38 per cent (US$19.3 billion) of digital ad revenue. Facebook took nearly 10 per cent in 2014, and is the biggest recipient of total digital display and mobile display advertising revenue.
— Eight out of 10 smartphone users check their device within 15 minutes of waking up. It’s a fight for audience’s attention and mobile has it.
— Globally consumers spend an average of almost 2.2 hours per day with mobile (97 minutes) and tablet (37 minutes), which together account for 37 per cent of media time, ahead of television (81 minutes), the desktop (70 minutes), radio (44 minutes), and print (33 minutes), according to the InMobi mobile media consumption report.
— App usage represents about half of mobile engagement, with leading media now seeing 30 per cent or more of their monthly audiences coming exclusively from mobile platforms.
— For the first time, desktop audience numbers are falling. Time spent using smartphones now exceeds web usage on computers in the United States, the United Kingdom and Italy. For 19 of the top 25 US newspaper sites, mobile traffic exceeded desktop by at least 10 per cent, according to Pew Research. Those who use only mobile devices to consume newspaper digital content increased 53 per cent in March 2015 from the same month a year ago, according to a report from the Newspaper Association of America.