The newspaper industry continues it's decline. Every year the trends and statistics show no sign of slowing down. I want to share with you a few trends that highlight this as newspapers continue the struggle to see an end in sight. I will also reveal some positive trends that will hopefully level off the decline.
Why do newspapers continue to decline?
Newspapers live and die according to ad revenue. So here's the problem: the news reporting industry is extremely time sensitive and so the traffic goes to those that report it first. For the rest, it's yesterday's news.
The graph below shows the peak of newspaper advertising revenue at 67 billion in the United States. As of this year (2020) it's a meager 10 billion and the steepness of the decline is not letting up.
Who is to blame?
You can thank the likes of Facebook and Google. They are not the lone culprits of course, but the trend shown above tells a lot. Ad revenue this year for Facebook stands at about $70 billion and Google is at a cool $160 billion. The blame cannot be squarely placed on these two companies, but advertisers clearly have alternatives.
The trend continues.
Statistics point to a continued decline in newspaper advertising revenues. Below is a projection for advertising revenue to newspapers. It projects 5.53 billion dollars in revenue by 2024 and the trend shows no indication of leveling off.
What the printing industry is going about it?
Newspapers have been adding full color to all pages in recent years by making large investments in printing equipment. But this hasn't slowed the trend. What it does do however is allow more flyer printing.
Two unexpected trends.
In all of this, an odd trend has arisen. People are almost oblivious to what is written in a newspaper. But the flyers inside are what people look for. One press room manager said that the newspaper is simply a blanket for the flyers.
This is why people walk into a large grocery store and grab the flyer on the way in. They don't go online. They want the flyer. Why? Shoppers love tangible things. Hence, newspaper printers continue to see their page count go down and the number of flyers inside increasing. In this respect, newspapers have been given a lifeline.
Magazines and newspapers are utilizing another trend. Customer requirements have become much more complex. Some printing jobs require specialized coating or inks. It is estimated that in the offset printing industry, up to 35 percent of all print jobs have complex requirements. Offset printers have invested in the ability to do these jobs on their presses. The bonus is that 60% of their profit comes from these print runs. Commercial printers have benefited more than newspapers, but the trend is another saving grace for the printing industry.
A light at the end of the tunnel?
Digital ad revenue for newspapers is NOT declining. In fact, daily newspapers that have established themselves nationally, or even internationally have been given another lifeline.
The graph below shows the percentage of revenue of newspapers coming from digital advertising. Digital advertising now accounts for more than 30%!
Well established newspapers like the New York Times are in the top 50 most visited websites in the United States. It received 800 million in digital advertising revenue in 2019.
Conclusion
The newspaper industry continues to spiral down in a frightening swing. Trends and statistics show no letup. But a more positive emerging trend will help level off that trend and keep some afloat. When the penny drops, the decline will finish and the newspaper can find it's place again in an ever changing world.
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