Demise of newspapers overstated, says OECD
NEWSPAPER PUBLISHERS in most rich countries face declining advertising revenues and lower circulation, but predictions of the death of the medium are unwarranted, according to a new report from the Organisation for Economic Co-operation and Development (OECD).
In a broad-ranging survey of the global newspaper publishing industry, the Paris-based agency found the number of newspapers worldwide had almost doubled in the past decade and noted striking differences in how papers in different countries were coping with greater competition and the internet’s advance.
The report showed that 20 out of 31 OECD countries face declining newspaper readership, particularly among young people. The US market has fared worst, shrinking by 30 per cent between 2007 and 2009, but the European press has proven more resilient, with Germany’s market contracting by 10 per cent, France’s by 4 per cent and Austria’s by 2 per cent.
The number of titles is also on the decline in the OECD region, though the report cites Ireland, Turkey and Portugal as countries that have resisted that trend.
Against a background of very profitable years, newspapers in most developed countries had seen a significant fall in advertising revenue and circulation since 2007 – a trend amplified by the economic crisis.
“However, the data and the large country-by-country differences, for instance, currently do not lend themselves to make the case for ‘the death of the newspaper’, in particular if non-OECD countries and potential positive effects of the economic recovery are taken into account,” the report states.
Overall, the global newspaper publishing market – defined as print and online circulation revenues of traditional newspaper publishers – is estimated at $164 billion for 2009. Its revenues exceeded those of recorded music ($27 billion), video games ($55 billion) and films ($85 billion), with the most buoyant newspaper markets now being found in China, India and elsewhere in the developing world.
The world’s most avid newspaper readers are in Japan, where 526 paid-for daily papers are circulated on an average day per 1,000 population. Next come Norway with 458, Finland with 400 and Sweden with 362. Interestingly, these OECD countries also have a very high broadband penetration. Readership is much lower in the US (160 per 1,000 population), Australia (116) and Italy (90).
Japan also provides five of the world’s top 10 paid-for dailies ranked by average circulation, including the world’s most read, Yomiuri Shimbun, which has a daily circulation of 10 million copies.
Examining the internet’s effect on reading patterns, the report found that in some OECD countries more than half the population read newspapers online, although active print readers tend to read more news on the web.
The share of people who only read online news “is likely to grow rapidly with new generations who start using the internet early in life,” it predicted. “The real concern, however, is that a significant proportion of young people are not reading conventional news at all, or irregularly.”
Looking at newspapers’ income, the report shows that the global market earns about 57 per cent of its revenues from print and online advertising and about 43 per cent from circulation, but the breakdown varies greatly between OECD countries. The reliance on advertising is very high in the US, where it accounted for 87 per cent of revenues in 2008, but also in Canada (77 per cent) and Ireland (65 per cent).
Papers such as those in Japan, where just 35 per cent of revenue comes from advertising, have been relatively insulated against the business cycle.
Across the OECD, online advertising only accounted for about 4 per cent of total revenues in 2009, but it grew rapidly before the onset of the economic crisis and the report predicts the shift in its direction will be durable.
It also suggests that the willingness of customers to pay for online news is low but increasing.
A striking theme running through the OECD’s analysis is the importance of individual and local factors in determining a newspaper’s performance. These include a paper’s place in its market, whether its content is specialised or generalist and its geographical reach. Stressing the diversity within the press industry, it points out that while some papers (Canada’s National Postand France’s Le Progrès) have lost about half their sales and others (London’s Daily Telegraphand the Washington Post) have seen circulation reduced by a fifth, there are examples of papers ( Ouest France, USA Today, the Wall Street Journal) with significantly increased sales.
“While it is clear that newspapers and other more formalised news outlets are experiencing threats and challenges to their more traditional business models from the internet,” the report concludes, “it is also true that we are experiencing a period of great opportunity that must be seized by industry to ensure the success of news outlets with the corresponding benefits to society and democracy that they offer.”