More than 439 Million People Buy A Daily Newspaper With Average Readership Estimated In Excess Of 1 Billion, But The Asia Growth Rate Is Slowing And It Is Still On The Decline In Europe And North America

Philip M. Stone in Moscow June 5, 2006 1200 CET

The good news coming from this year’s annual World Press Trends Report is that global newspaper sales still eked out some growth last year, and advertising sales continued strong in some areas, but the surge of readers to the Internet continues to have its affect, even in market-leader Asia.

The report, released at the World Association of Newspapers (WAN) Congress in Moscow today, said that overall global newspaper sales grew by just 0.56% compared to 2004 growth of 2.1%. The most growth continues to be in Asia but that, too, is slowing down. Sales were up there just 1.7% whereas a year earlier they had increased 4.19%. Global newspaper advertising grew 5.7%, the most in four years, but in the US, the world’s largest advertising market, the increase was just 1.57%.

Circulation continued its decline in Europe and North America, although Europe seems to be stabilizing somewhat. European sales were down 0.24% compared to a 1.4% drop reported the year before. North American sales continue their deterioration; this year’s report puts the numbers down 2.35%, adding to the 1% decline for 2004. The US 2005 losses particularly hit the PM market, the report said.

Asia remains the world’s circulation powerhouse with sales increasing in the world’s two largest newspaper markets – China (96.6 million copies sold daily, up 3.1 million over the year before) and India (78.7 million, up some 5 million over 2004),.  But in Japan – the third largest market – sales continued to decline, down 0.97% to 69.7 million copies daily.

The US, the largest market outside Asia, reported 53.3 million sales but the 2.35% total decline hides the fact it is the PM market that is really getting nailed.  PMs saw a 6.6% drop whereas in the AM market it was “only” down 1.6%. Over the past five years PM circulation has dropped 17.5% but the AM drop was limited to 1.4%.

Germany, Europe’s largest market, saw a 2.5% decline to 21.5 million sales.

The advertising picture saw revenues up globally 5.7% from a year ago – that’s an 11.7% increase over the past five years – but a closer look at the numbers shows those figures are really powered by a few countries.

In the largest newspaper market in the world – China -- The business boom continues – advertising there was up 19% (128% over the past five years). But the Chinese numbers are a bit deceiving since Chinese newspaper advertising growth in 2004 was 29% so while a 19% increase for 2005 would be welcome by any publisher the percentage increase is quite a bit less than the year before.

And for some other countries the growth is remarkable. In India, 2005 newspaper advertising revenues increased 23.18% (107.69% over the last five). South Africa also saw remarkable gains -- 20.71% over one year (232.23% over five years), and Turkey's percentage gains were even higher -- 39.14% in 2005 (236.61% over the past five years.)

Otherwise the advertising numbers are a bit ho-hum – the US up 1.51%, Japan down 1.7% although the European Union – powered by the newer members – saw an overall 4.15% increase. The percentages vary widely from country to country – the UK down 3.08% but Ireland up 12.35%.

To Timothy Balding, WAN CEO, though, it’s good news overall. Globally circulation is up, and if you take newspaper Internet activity into account then the newspaper industry is doing quite well in his view. “”Overall, the audience for newspapers keeps on growing, both in print and online,” he said. “Newspapers are increasing their reach through the exploitation of a wide range of new distribution channels, ranging from daily free newspapers to online editions. They are proving to be incredibly resilient against the onslaught of a wide range of media competition.”

The figures show there is no doubt that free newspapers and the Internet are having their affect on the newspaper industry. Free dailies, for instance, now account for 6% of all global newspaper circulation and 17% in Europe alone. Add the global free daily circulation to the paid-for circulation and the 0.54% increase becomes 1,21% and the 6% increase over the past five years for the paid-fors becomes 7.8% when you tack on the free papers.

As for the Internet, newspaper online consumption rose 8.71% in 2005 (200% over the past five years). Newspaper Internet advertising revenues rose globally by 24% in 2005, the highest percentage increase in five years, and the number of newspaper web sites increased by 20%.

The number of free newspaper titles continues to grow. In 2005, 169 free daily newspapers had a combined circulation of 27.9 million daily, of which 18.6 million were distributed in Europe. In Spain, for instance, free newspapers hold 51% of the market.

And format changes, mainly from broadsheet to tabloid although there have been a few to Berliner, continue. In 2005, 28 newspapers moved to tabloid (85 since 2001).

The unanswered question in all of this is what is the future of the paid-for newspaper? Free newspapers are obviously drawing circulation away from the paid-for newspaper, but then many publishers are adopting a “if you can’t fight them join them” philosophy and are running their own free newspapers as well as their paid-fors.

The best example is in the UK where DMGT owns national and regional newspapers but also publishes the free Metro in several cities whose editions have a combined circulation of more than 1 million and are said to earning around £10 million profit this year.

And newspaper web sites are indeed doing well. The problem is that print is losing advertising revenues at a faster pace than newspaper web sites can add that revenue back. The obvious answer is convergence, not just editorially but also on the advertising front, between a newspaper’s print edition and its web site but for many newspapers that seems to be in its infancy.

More facts from the report:

Circulation:

• Paid daily newspaper circulations rose in 35% of the countries surveyed and for non-dailies it was 54%. And Sunday circulation increased in 36% of the countries.
• Of the world’s top 10 best selling newspapers, seven are in Asia.  Of the top 100 best selling newspapers, 62 are printed in China, Japan and India.
• Circulation rose 1.7% in Asia in 2005 over the previous year, up 3.7% in South America, up 0.2 % in Africa, down 0.24 % in Europe, down 2.5 % in North America and down 2% in Australia and Oceania.
• Daily paid newspapers in the European Union saw a 2005 drop 0.61% (5.26% over five years). When free dailies are added, year-on-year circulation increased 1.34% (0.05% over five years).
• Newspapers in seven European Union countries increased their total circulation in 2005: Austria, 0.42%; Czech Republic, 4.88%; Ireland, 2.16%; Italy, 0.03%, Poland, 9.80%, Slovenia, 19.44%, and the United Kingdom, 0.05 %.
• Reporting losses were: Belgium, 1.35%; Denmark, 2.64%; Estonia, 0.39%; Finland, 0.67%; France, 1.6%; Germany, 2.5%; Greece, 4.05%; Hungary, 0.68%; Latvia, 2.25%; The Netherlands, 3.67%; Portugal, 3.88%; Slovakia, 4.17%, Spain, 0.94%; and Sweden, 1.34%.
• Between 2001-2005, circulation rose in five countries: Austria, 0.09%; Czech Republic, 0.87%; Ireland, 28.91%; Latvia, 1.46 %; and Poland, 21.63%.
• Declines in that same period were: Belgium, 4.25 %; Denmark, 11.4 %; Estonia, 0.78%; Finland, 2.99%; France, 7.38%; Germany, 9.63 %; Greece, 11.62%; Hungary, 12.31%; Italy, 5.25%; Netherlands, 10.58%; Slovakia, 8.55%; Spain, 1.73%; Sweden, 2.23%, and the UK, 9.85%.
• Elsewhere in Europe, Turkey climbed 11.92% (up 52.48 over five years) and Croatia was up 7.59% (down 16.63% over five years), Norway declined 2.78% (7.48% over five years) and Switzerland is down 3.26% (8.69% over five years).
• US daily circulation fell 2.35 % in 2005 (4.02 % over five years).
• In Japan, newspaper sales fell by -0.97 % in 2005 (2.81% over five years).
• China newspaper sales rose 8.9% (18 % over five years).
• In Russia, the number of daily titles grew by six to 491 in2005, an increase of +1.2 %. No reliable circulation figures exist for the Russian press.
• In Latin America, where reliable data is difficult to obtain, Brazilian newspaper sales were up 4.09 % in 2005 (down 11.4% over five years). Chile reported sales increases of 0.33% for 2005.
• Indian newspaper sales increased 7 % in 2005 (33% in five years).
• Elsewhere in Asia, sales in Singapore were down 0.2 % in 2005 (3.9 % in five years); and Malaysia was up 5.44% (14.63% over five years.)
• Australia was down 2.23 % in 2005 and New Zealand was down 1.35%.

Who Buys and Reads?

• With circulation at Norway’s leading tabloid, VG, down greatly the past couple of years as readers flock to its web site it comes as little surprise that the Japanese have surpassed Norwegians as the world's most avid newspaper readers with 634 daily sales per 1,000 adults in Japan compared to 626 in Norway. Finland is third with 518 followed by Sweden with 481. It’s interesting to note that even though the Nordic area is among the world’s most wired Internet community, their citizens remain avid newspaper readers.
• The Belgians spend the most time with their newspapers -- 54 minutes a day. Ukraine is second  (50 minutes,) and then Canada (49 minutes.)

New Titles:

• The total number of paid daily titles in 2006 dropped globally 0.3 % (but up 8.1% over five years), taking the  2005 total to nearly 7,700 dailies. When free dailies are added, the number of titles increases 0.06% year-on-year, to 7,862 (up 8.9 % over five years).
• The number of paid daily titles was up 4.5 % in Africa, 1.4% in South America, and +1.2% in Australia and Oceania. The number of titles declined 1.2% in Europe, 0.4 % in North America and 0.3 % in Asia.

Advertising:

• Global newspaper advertising revenues had their largest increase in four years, 5.7% in 2005, on top of a +5.28 % increase in 2004.
• Newspapers share of the world ad market held relatively steady with 30.2%, marginally down from 30.3 % in 2004. Newspapers remain the world's second largest advertising medium after television.
• Twenty-one countries saw newspaper advertising market share growth in 2005: Argentina, Austria, Belgium, Chile, Colombia, Egypt, Finland, Germany, India, Indonesia, Kuwait, Lithuania, Malaysia, Panama, Poland, Russia, Saudi Arabia, Singapore, South Africa, the United Arab Emirates, and the United States.
• Over five years, newspapers in 24 countries and territories saw increased market share: Argentina, Belgium, Colombia, Costa Rica, Czech Republic, Denmark, Ecuador, Egypt, France, Greece, Iceland, India, Ireland, Japan, Kuwait, Lebanon, Malaysia, Myanmar, Norway, Pakistan, Poland, Puerto Rico, Russia and Slovenia.
• Newspaper advertising revenues in the USA, by far the world’s largest newspaper advertising market, increased by 1.51% in 2005 (7% over the last five years).
• In Japan, ad expenditures declined in 2005 by 1.7 % after showing positive growth in 2004 that had followed three years of decline.
• China advertising revenues increased 19% last year, and 128% over five years.In India, 2005 newspaper advertising revenues increased 23.18% over one year (107.69% over the last five).
• The European Union saw a 4.15 % increase in newspaper advertising revenues in 2005 (37.3% over five years.)
• Thirteen of 17 countries for which data was available showed increases in advertising revenue in 2005: Belgium, 1.5%; Czech Republic, 6.38%; Denmark, 9.45%; Estonia, 17.86%; Finland, 1.57%; France, 0.89%; Hungary, 6.79%; Ireland, 12.35%; Italy, 1.98%; Latvia, 9.45%; Poland, 4.36 %; Spain, 6.93%; and Sweden, 5.6%,
• Newspaper advertising revenue declined in Greece, 1.92%; Lithuania, 7.04 %; Netherlands, 1.6%; and the UK, 3.08%.
• Over five years, advertising revenues were up in 10 of the countries for which data was available: the Czech Republic, 48.99 %; Denmark, 6.09%, Estonia, 47.32 %; Finland, 4.64 %, Greece, 18.05%; Hungary, 39.3 %; Latvia, 43.3 %; Lithuania, 29.41%; Netherlands, 20%; and Poland, 92.8%.
• Advertising revenues declined in the five-year period in four EU countries for which data was available; France, 4.66%; Italy, 3.1%; Sweden, 0.41%, and the UK, 2.5 %.
• In Russia, 2005 advertising revenues for all print media increased 16%.
• In Australia revenues were up 8.14 % over one year (0.46% over five years.)

Internet

• Newspaper online consumption rose 8.71% in 2005 (200% over five years). Internet advertising revenues rose 24% in 2005, the highest growth for five years and the number of newspaper web sites increased in 2005 by 20%.

Free Dailies:

• The size of the free daily market in several countries is impressive: in Spain, free daily distribution represents 51% of the market; Portugal, 33%; Denmark, 32 %; and in Italy, 29%.

It’s a very mixed bag but one conclusion does stand out – it is the emerging markets – take note of India, Turkey, and South Africa in particular – where newspapers are really booming. And the more mature a market becomes the less is its growth.

Maybe that’s why so many international newspaper companies are booking their Passage to India!

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