Newspapers making more money from readers than advertisers

The times they are a-changin’ 

Title of Bob Dylan song

Particularly for newspapers. In a surprising way.

Advertising used to provide up to 80% of a newspaper’s revenue. Now newspapers are making more money on circulation (subscriptions) than on advertising.

Wow!

That’s the word from the annual World Press Trends survey released by the World Association of Newspapers and News Publishers.

Readers, not advertisers, are the big source of revenue. A reversal of a century-old business model.

There’s a catch, as there are with most statistics. It’s not that circulation went up; it’s mostly static. It’s that advertising revenue has gone down so much that it freefell below the readers’ subscriptions payments.

Check for yourself by clicking on http://www.wan-ifra.org/press-releases/2015/06/01/world-press-trends-newspaper-revenues-shift-to-new-sources

 

 

 

 

 

 

World Parress Trends: Newspaper Revenues Shift To New Sources

2015-06-01

A profound shift in the newspaper business model, evolving for years, is finally here.

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."

Newspapers generated an estimated US$179 billion in circulation and advertising revenue in 2014 -- larger than the book publishing, music or film industries. Ninety-two billion dollars came from print and digital circulation, while 87 billion came from advertising, the survey said.

"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.

But 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."

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.

The survey, presented annually at the global summit meetings of the world’s press, revealed:

The Future is Mobile

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.

"When it comes to new revenues, we have been talking about the year of mobile for the last 10 years," Mr Kilman said. "It has finally happened. In 2014, desktop Internet usage globally decreased in favor of mobile. And mobile app usage is becoming the majority of all digital media activity in the United States."