Ovum’s new Digital Consumer Publishing Forecast is published tomorrow. It takes a five year view at how this sector will change. Ahead of publication, Ovum analyst Charlotte Miller gives TheMediaBriefing an exclusive look at some of the key findings related to publishing’s revenue mix.
It is rare for an executive in the publishing industry, when contemplating the next five years, to talk positively about print. Digital dominates industry conversations as publishers seek to transform their businesses and engage an audience of connected, if fickle, readers.
Yet according to Ovum‘s new Digital Consumer Publishing Forecast, which quantifies the prospects for the global consumer publishing industry in the next five years, the resilience of print, despite the growth of mobile and digital consumption, may still be underestimated.
Digital is growing, but not as fast as you might think
At an aggregated level, combining revenues from the newspaper, book, and magazine industries across more than 50 markets worldwide, we forecast that just 24% of revenue will come from digital in 2020, up from 14% in 2015.
Digital revenues from publishing will grow at a CAGR of 13% to reach US$74bn in 2020, up from US$41bn in 2015.
But, in terms of both consumer and advertiser spend, despite a decline in print revenue and all the investment in (and noise around) digital, print will continue to dominate.
So the printing presses won’t be closing anytime soon, even in the US and the UK, where the transition to digital is more rapid. Even in these two markets, digital will still only account for a minority of overall revenue in 2020, with shares of 42% and 37%, respectively.
Figure 1: Even in 2020, print will be the format of choice for consumers
Source: Ovum, PwC
The book industry leads the way in the transition to digital revenues
In the UK, the book industry generated 20% of its revenue from digital in 2015 compared to 16% for magazines and 14% for newspapers, and these shares will rise to 63%, 32%, and 26%, respectively by 2020.
In the US, we see digitisation levels of 41% for books, 24% for magazines, and 17% for newspapers in 2015, rising to 63%, 47%, and 24% in 2020.
But both markets are ahead of the global trend, which sees the book industry making 17% of its revenue from digital compared to 14% for magazines and 8% for newspapers.
By 2020, globally, we will see digital’s share of revenues rise to 35% for books, 31% for magazines, and 15% for newspapers.
Figure 2: By 2020, eBooks will account for more than half of consumer book revenues but magazines and newspaper readers will still prefer print
Source: Ovum, PwC
So even for the book industry in the US – the most digitised publishing industry in the most digitised market – print will still account for over a third of all revenue in 2020.
Consumers are still going to buy print books in 2020 but they will supplement that with digital reading, saving print for special occasions such as gifting, where digital can’t compete.
Of course print may be resilient across books, magazines, and newspapers, but (with a few notable exceptions, such as India) it continues to decline in nearly every category and nearly every market: digital is where the growth lies, with mobile as the major driver of change.
The challenge for publishers, then, is about maximising legacy print revenues while seeking to grow those from digital as rapidly as possible. But are publishers too quick to kill off their legacy businesses?
Publishers must continue to innovate in the digital space and respond to evolving consumer demands. But they can’t afford to abandon print just yet.
Ovum is a leading global technology research and advisory firm. Through its 180 analysts worldwide it offers expert analysis and strategic insight across the IT, telecoms, and media industries.
Ovum is a division of Informa plc, one of the leading business and academic publishing and event organisers globally, headquartered in London.