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Global newspaper industry set for a long-term decline

Press Release   •   Jul 02, 2013 11:07 BST

The global newspaper industry has been forecast to increase at a compound annual growth rate (CAGR) of 0.2% over the next three years, increasing from total revenues of $83,090.7 million in 2011, to reach a value of $83,885.1 million by the end of 2016.

A newspaper is a periodical publication containing news regarding current events, informative articles, diverse features, editorials, and advertising. It usually is printed on relatively inexpensive, low-grade paper such as newsprint.

By 2007, there were 6,580 daily newspapers in the world selling 395 million copies a day. The late 2000s-early 2010s global recession, combined with the rapid growth of web-based alternatives, caused a serious decline in advertising and circulation, as many papers closed or sharply retrenched operations.

The newspaper industry has been in long-term decline; however, due to the recent economic crisis, the rate of decline has increased. The declining value is due to a drop in circulation, with fewer consumers buying titles, while newspaper advertising revenue -- which makes up a large proportion of the industry's value -- has also decreased.

This latter factor is due to fewer companies having the money to invest in advertising in the current economic climate; with fewer consumers buying newspapers, investors are becoming increasingly disinterested in advertising in them.

The national sector is the largest in terms of value, although both sectors have witnessed a decline in value over the last decade. Regional papers have been greatly affected by a loss of advertising revenue, as generally, local companies use them for advertising, and it is these companies that have been most affected by the recession.

Furthermore, in terms of business strategy, advertising expenditure is often cut in times of financial hardship, as can be witnessed over the last few years, which have seen advertising revenue for regional titles fall dramatically.

For centuries newspapers were printed on paper and distributed physically to readers, however, virtually all printed newspapers now have online editions distributed over the Internet which, depending on the country may be regulated by journalism organisations such as the Press Complaints Commission in the UK.

But as some publishers find their print-based models increasingly unsustainable, Web-based "newspapers" have also started to appear, such as the Southport Reporter in the UK and the Seattle Post-Intelligencer, which stopped publishing in print after 149 years in March 2009 and went online only.

These digital means are believed to have become increasingly popular among consumers; however, in terms of their potential for the newspaper groups, the online alternatives are often less financially valuable. This is due, in part, to consumers' unwillingness to pay for news on the Internet, when the same information is readily available elsewhere for free.

Despite this, the emphasis on an online presence has led to falling production costs, as less revenue is required when distribution and production decline, while for many their focus has changed as they move efficiently into the digital era.

For more information on the global newspaper industry, see the latest research: Global Newspaper Industry

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