Global Newspaper Circulation And Advertising Decline

Philip M. Stone September 2, 2010 Follow on Twitter

Every year the World Association of Newspapers and Newspaper Publishers (WAN-IFRA) releases its World Press Trends covering 223 countries and the lead is basically the same – overall global daily newspaper circulation has gone up because of big gains mainly in India and China while Europe and North America go steadily down. But not for the 2009 -- even with some Asian growth overall global circulation and advertising revenues fell.

Given the economic downturn WAN-IFRA says a 0.8% global circulation decline is still good going but it compares to a 1.3% growth in 2008. The 17% drop in global newspaper advertising revenue is surely bad news with a large change from the 5% decline recorded in 2008. Even so, WAN-IFRA says there are 1.7 billion people – about 25% of the world’s adult population -- reading a daily newspaper.

But dissect the numbers and the various parts of the world are performing very differently. Asia still saw a circulation increase, but it was only 1%, whereas in Europe it was down 5.6% and in North America it was down 4.6%. But the ad spend was rotten everywhere – North America down a whopping 25%, Western Europe down 13.7%, Central and East Europe down 18.7%, Asia 9.6% and South America down 2.9% The Middle East and Africa stayed stable.

And the last five years of advertising trend are horrible – overall down 17.9% with North America off a shocking one-third, Western Europe down 15%, and even in Asia it was down 5.4%.

But even with all of that WAN-IFRA CEO Cristoph Riess still extols, “Frankly, I have noticed a tendency amongst media journalists and commentators to dwell on the negative aspects of the business when it’s clear there is much to be positive about.”

With that we went searching for the positives. There was good news that the number of actual newspaper titles globally increased by 1.7% from a year earlier, to 12,477 which, if our math is right, means an increase of some 190 titles. In 61% of the countries circulation was stable or increased a bit and forecasts from Zenith Optimedia say there should a be a global increase of some 3.5% in newspaper advertising next year with all regions seeing positive growth.

The WAN-IFRA CEO accepts that the digital revolution is at the core of a reviving newspaper business but finding the right business model to grow revenues is still elusive given that print is declining so quickly in the “mature” world.

 "Many newspaper companies in mature markets have embraced digital platforms
and new forms of print publishing, growing their product portfolios, audience reach and revenues, even while their traditional print circulations have come under pressure," Riess said. "In fact, it is this metamorphosis of the printed newspaper business into a dynamic, print based but digitally expansionist new media business model, that is both the problem and the opportunity for our industry.

"The evidence is building that, for many, our print business is facing deep changes. We know of the challenges facing our large metro-based newspapers in developed markets, but we hear less of the changing and expanding printed newspaper market elsewhere, where new products and new newspapers are launched to match the needs of a rapidly evolving and increasingly sophisticated market," he said.

The three largest newspaper markets are in Asia – India (110 million copies sold daily), China (109 million) and as a distant third, Japan (50 million). It is down to 46 million in the US and Germany is the largest European market with 20 million. Sixty-seven of the world’s 100 largest daily newspapers are in Asia.

The almost daily announcements of new free newspaper launches are gone, and there has been much upheaval in that sector via culls resulting in the survival of the fittest but those remaining are still a force to be reckoned with. In Europe, for instance, free newspapers now account for a huge 20% of all circulation and in North America it is 7%.

WAN-IFRA says that “at no time in the foreseeable future will digital advertising revenues replace those lost to print,” which is why finding new business models is so important, including perhaps most importantly determining how much people are willing to pay for their news online. Mobile may be a great chance to reap some of that revenue but WAN-IFRA warns, “An advertising model has yet to emerge, and those who control the channels have, as yet, shown little interest in content and partnerships.”

And WAN-IFRA is not as positive as one might have thought about the iPads and Kindles of the world. “Digital readers show promise, but must also overcome problems of readability and the need for powerful batteries, which are expected to be heavy and polluting for the foreseeable future.”

WAN-IFRA says that newspaper advertising globally still supplies the most bang for the buck but advertisers apparently believe differently with 39% of global spend going on TV,  with 24% for newspapers and 12% on  the Internet.

And as a big example of why Internet advertising revenues just don’t seem to be there for newspapers although Internet ad revenue continues it seemingly never-ending climb WAN-IFRA notes that  a majority of that market is in search which is why Google, with about 65% of search ads, is the company it is today.

So, much as WAN-IFRA dislikes negative stories about newspapers its own numbers really don’t make happy reading. No matter the spin, the fact is that newspapers in some parts of the mature world, particularly the US, continue to experience declining ad revenues this year, albeit at lower percentage drops than in past years, but considering that in the US those revenues are down a third in five years and it’s not over yet then optimism on the revenue side is still hard to come by.

And while WAN-IFRA talks about the number of newspapers circulated and the revenue earned it doesn’t touch upon the question of quality. It doesn’t count the number of journalists fired in each region over the years, but as we all know the numbers are significant. Therefore, are readers getting the same quality product as, say, five years ago? That, of course, is highly subjective but the health of the newspaper industry is not just to be found in circulation and advertising figures, but also in the quality of the end product.

See also in ftm Knowledge...

Media Business Models Emerging

After a rough transition media business models are emerging. Challenges remain. There are Web models, mobile models, free models, pay models and a few newer models. It makes for exciting times. This ftm Knowledge file examines emerging business models and the speed-of-light changes. 123 pages PDF (May 2010)

Available at no charge to ftm Members, others from €49
Order