It’s time for newspapers to explore new revenue streams

The total global newspaper revenue generation in 2013 was $163 billion. This, by the way, is more than global consumer and educational book publishing revenues (102bn), global filmed entertainment revenues (87bn) and global music revenues (50bn). In this, circulation revenue was $78 billion and advertising revenue was $85 billion. The best part was, print still accounts for 93% of newspaper revenues.

These figures were revealed by Vincent Peyregne, CEO, Wan-Ifra, Paris, during his keynote address on World Press Trends 2014 at the Wan-Ifra India 2014 conference, which was held in New Delhi on 17-18 September, 2014.

Peyregne said printed newspapers are still valid and are an important part of human civilization. This is why people still talk about freedom of expression and those in power still care about what newspapers write about them, though at times they may try to suppress it.

Yet, the threats print faces from the digital mediums are also very real and newspapers must brace themselves to tackle the changes. In this context, World Press Trends 2014, compiled by Wan-Ifra, becomes a valuable document as a guide to the global newspaper industry, in numbers, trends and changes. Based in Paris and Frankfurt, and with subsidiaries in Singapore, India and the US, Wan-Ifra represents news media industry in 120 countries, which includes more than 18,000 publications, besides more than 15,000 online sites, 3,000 companies and 80 associations.

Back to World Press Trends, in 2013, Asia Pacific had the biggest, 36%, of total revenue of the newspaper industry, followed by EU/Africa/ME (34%), North America (21%) and Latin America (9%).

Yet, revenue streams are constantly in flux. If we consider the US market as the benchmark, the years between 2007 and 2013 throw up some interesting changes. In 2007, in the US market, ads revenue was 81% and circulation revenue 16%. In 2013, ad revenue shrunk to 46% and circulation rose to 29%. In this, there were several new entrants to the pie. In 2013, digital ads revenue was 9%, the niche market revenue was 8% and new/other sources of revenue was 8%. Thus, according to Peyregne, it’s time to move away from the traditional way of doing the business and step up the game.

In 2013, 2.5 billion, that is, 49% of all adults read print newspapers. This is a good number. At the same time, 0.8 billion, or 46% of all internet users, read newspapers in digital format. So, there is another market out there. With the world population now pegged to be more than 7 billion, Peyregne said there is a huge market out there for both printed and digital newspapers.

Meanwhile, the circulation units of global newspapers have not changed much. In 2009, it was 548 million copies daily and in 2013, it was 534 million copies every day. While the circulation figures were down in North America, Australia and Oceania and Europe regions, the growth in print circulation was propelled by Asia and Latin America. In short, newspapers are doing well in India.

Yet, people are also moving towards paid content in the digital mediums. In 2012, the global daily digital newspaper paid circulation was 1,093 million. It rose by 60% to 1,753 million in 2013. Among the web users, mobile represents 25% of total web usage until May 2014, against total 14% in 2013.

What do we learn from these figures? Peyregne explains. It is no longer a debate between print and digital. The focus should be on multi-platform revenue streams. Peyregne said in traditional print, publishers must realign the ad vs consumer ratio, focus on niche publications, and rely on margins to build future business models. In digital, Peyregne said, there should be a combination between paid content and advertising, and it should have everything, mobile, social networking, online video, search and so on. There are also other sources of non-traditional revenues, such as personal information management services, digital agency/marketing services, event marketing, e-commerce transactions, direct marketing and so on.

The idea, according to Peyregne, is build on the audience to embrace disruptive revenues (other than ads and circulation). For this, CIOs and CMOs should start forging strategic partnerships, learn from innovation and start-ups and finally, fight collectively for the publisher’s rights in the digital age.