The World Association of Newspaper and News Publishers (WAN-IFRA) has put out its annual report of global press trends. While the report takes in many aspects of the media industry (including the incredibly unexpected prediction that non-game app revenue will equal game revenue by 2017, a seismic shift in the industry compared to even last year), there are some startling figures related to the circulation and advertising revenue of news organisations worldwide.
We’ve taken a look at the report to break out the headline figures – including that 2014 saw global newspaper revenue of $179 billion – and marry them to our own forecasts about how the media industry is likely to progress over the coming years.
The good (or least bad, depending on how you frame it) news for the global newspaper industry is how relatively stable the global circulation revenue has remained over the past five years. In fact, that figure is less than a percent different than it was back in 2010, and hasn’t moved more than the single percent point either way between each of those years.
That’s not to say, though, that it’s because of a stable print circulation figure, but in part because a notable rise in digital circulation figures during that time has compensated for the falling print figure. As you can see, while the global digital newspaper circulation back in 2010 amounted to $165million, in 2014 it was $2486million.
In the same time period, digital advertising revenue for newsbrands has also risen – though not to the extent to which digital circulation has.
Additionally, that global circulation has remained relatively static over the past few years is, in fact, bad news for publishers in the West. The sole factor keeping that figure hovering around the same percentage point is an explosive boom in print circulation in Asia. The circulation of print newspapers in the region has risen by 32.7 percent over the past five years. Meanwhile, the Western territories of North America, EMEA and Australasia and Oceania and fallen significantly over that time.
So while it’s good news for publishers in emerging markets, the potential to increase circulation revenue in Western territories is shrinking along with consumers’ desire to pay for news. You can only increase print newspaper costs for so long before nobody will buy, them, after all. And further WAN-IFRA results demonstrate that people in the West are significantly less likely to pay for digital news, with only 7 percent of Brits having done so in 2014 (global average of 11 percent).
That’s a figure that shines a new light on The Times and Sunday Times’ £1.7 million operating profit of last year, of which only 44 percent came from advertising. As Peter Peston explains:
“That’s hugely different from bygone times when quality papers might aim to make 80% from ads and a mere 20% from cover price. But it still seems to mean a profit on the bottom line, one bulwarked by circulation and not by an ad take that appears to slide lower and lower every passing digitised year.”
That suggests that, even with the vast impediment of having under 10 percent of your home countrymen willing to pay for news, it is possible to generate revenue from digital circulation. Or it could be that a lot of the Times’ and Sunday Times’ subscribers do not come from within the UK’s border [N.B. there are still questions around that figure of £1.7 million].
The worst news of all for many publishers is that, despite the increase in global circulation revenue and an increase in digital ad spend from which they benefit, it still isn’t enough to compensate for the overall decrease in print ad spend.
That’s obviously bad news for all the big players in the news publishing game, most of whom have grown to the scale they’re at through commanding a good print ad revenue proposition. Print and digital circulation revenue remains higher than print and digital advertising revenue. But as we’ve seen, that’s bad news for Western publishers, most of whom do not have the ability to monetise an audience who are mostly unwilling to pay and whose digital ad revenue still has a long way to go to cushion falling print revenue.