The World Association of Newspapers and News Publishers (WAN-IFRA) held its annual congress in Vienna, Austria last week, talking to the theme “Taking Publishing to the Next Level”. It also presented its yearly update of current trends shaking up the world of newspapers. The big message was: newspaper circulation might have declined, but it has been made up by an increase in digital audiences. At the same time, newspapers still reach more people than the Internet.
“Circulation is like the sun. It continues to rise in the East and decline in the West,” said Christoph Riess, CEO of WAN-IFRA, who presented the annual survey [last] Thursday at the Congress and World Editors Forum.
The survey found:
– Media consumption patterns vary widely across the globe. Print circulation is increasing in Asia, but declining in mature markets in the West.
– The number of titles globally is consolidating.
– The main decline is in free dailies. “For free dailies, the hype is over,” said Mr Riess.
– For advertisers, newspapers are more time efficient and effective than other media.
– Newspapers reach more people than the Internet. On a typical day newspapers reach 20 percent more people world-wide than the Internet reaches, ever.
– Digital advertising revenues are not compensating for the ad revenues lost to print.
– Social media are changing the concept and process of content gathering and dissemination. But the revenue model for news companies, in the social media arena, remains hard to find.
– The business of news publishing has become one of constant updating, of monitoring, distilling and repacking information.
– The new digital business is not the traditional newspaper business.
Riess’s presentation focused on six key areas: the media consumption shift; economic developments; newspaper circulation and number of titles; advertising expenditure by media; newspaper revenue; and Internet versus mobile.
The 2011 report focuses on the 69 countries that account for 90 percent of global industry value in terms of circulation and advertising revenue. “We’re concentrating on value rather than volume, focusing on key numbers in key markets,” said Riess. “Our approach puts a premium on insight over numbers.”
This reflects feedback from industry stakeholders, as part of the new WAN/IFRA review. But the survey will continue to monitor all countries.
Media Consumption Shift
When measured in minutes per day, media consumption patterns vary widely. For example, television dominates in the United States, Internet accounts for one-third of media time in Austria, and digital gets just a fraction of consumption time in Russia. Time spent with newspapers is low when considering their impact and influence on society, compared with other media – and to their advertising revenues.
“Newspapers have always had a lower percentage of the time spent by the media user, relative to the high advertising revenues that newspapers produce,” said Riess. Newspapers account for 8% of media consumption time, but 20% of all advertising revenue. “We have always been extremely efficient in using the time of our readers. But now we are in a more challenging environment, because readers are more promiscuous, they have more choices, they read newspapers with less frequency. We have to do more to attract them, find new ways to garner loyalty.”
There is no doubt that Internet consumption is increasing world-wide, to the cost of broadcast more than other media, the report found. Radio consumption in terms of minutes per day has fallen 23 percent since 2006, compared to 7 percent for newspapers, it found.
There appears to be a structural shift in advertising and newspaper revenues. Long mirroring the growth and contraction of Gross Domestic Product, both global advertising revenues and newspaper revenues appear to be decoupling from their patterns related to GDP.
In the 20 years to 2001, advertising revenue increased more than GDP in an upturn, and fell farther than GDP in a downturn. “But this has not been true since the 2001 downturn,” said Mr Riess. “After 2001, we have had good growth in Asia, but, contrary to the previous 20 years, advertising revenues increases were not higher than GDP during a recovery. And we have a greater decoupling of newspaper advertising revenues, which don’t follow the recovery as in the past. We have a structural change in general, especially in newspapers.”
Daily print newspaper circulation declined from 528 million in 2009 to 519 million in 2010, a drop of about 2%. But what has been lost to print has been more than made up by digital newspaper readers. Digital audiences are typically a third of print readership. So against a 2% decline, digital growth is significantly greater.
In fact, when measured in terms of readership, newspapers reach 2.3 billion people every day, 20 percent more than the 1.9 billion that the Internet reaches world-wide.
But the significance of this is not the total numbers, but in changes in purchasing patterns. “We get readers, but less regularly,” Riess said. “It’s the same with digital – the problem isn’t visitors, but frequency and depth.” Riess said the patterns required a reconsideration of newspaper subscription models, and of finding new ways to convince readers to come back.
“Newspapers are about communities, either of geography or of interest,” he said. “It is in satisfying these communities that newspapers can still flourish.”
Advertising Expenditures by Media
Television continues to be the world’s largest advertising medium, with a total ad expenditure of 180 billion US dollars in 2010. Newspapers were second with 97 billion, followed by Internet (62 billion), magazines (43 billion) and radio (32 billion).
Newspaper advertising revenues took a big hit in the global recession, but the decline slowed in 2010. Globally, newspaper advertising revenues declined 23% over five years and only 3 %last year.
Mobile vs. Internet
Which offers a better business model for newspaper companies – Internet or mobile? Again, it depends on the market, said Riess, and there are wide variations around the world.
In Russia, for example, mobile penetration is 130 percent compared with 30 percent for Internet, so clearly mobile offers better opportunities. The same goes for India, where 60 percent of its one billion population has mobile telephones. In the United States, where the penetration of both mobile and Internet is high, both platforms offer opportunities.
The Internet advertising model has been well-established, but most of the revenue goes to search engines – 65 percent to Google alone.
On the mobile platform, the paid-content model is well-established, since users accept monthly contracts, pre-paid phones and paid-for apps. But here too, new players – Apple and the mobile operators – take a large share of the revenue. “If we’re not careful in the newspaper industry, they will take away our business,” Riess said.
“But this world isn’t easy, it isn’t either Internet or mobile, there will be different ways to use these channels and there will by hybrid ways – like tablets – that will use both the paid content and the advertising models. Every company has to look at its target group and readership, and this group defines how best to reach it. And this has to be reconsidered constantly.”
WAN-IFRA, based in Paris, France, and Darmstadt, Germany, with subsidiaries in Singapore, India, Spain, France and Sweden, is the global organisation of the world’s newspapers and news publishers. It represents more than 18 000 publications, 15 000 online sites and over 3 000 companies in more than 120 countries. Its core mission is to defend and promote press freedom, quality journalism and editorial integrity and the development of prosperous businesses.
Learn more about WAN-IFRA at http://www.wan-ifra.org or through the WAN-IFRA Magazine at http://www.wan-ifra.org/magazine