Roy Greenslade 

Report predicts newspaper revenue growth in 2015 – but not in the UK

West will miss out on global advertising surge
  
  


The revenue decline for the newspaper industry will end next year, according to the latest global entertainment and media outlook report by PricewaterhouseCooper (PwC).
It forecasts that newspaper revenue will start to climb again in 2015 as growth begins to exceed decline in mature markets, and that growth will stabilise at 0.1% through to 2018.

But - never forget the "but" - newspapers' fortunes will vary significantly across the world. The Asia-Pacific market is set to grow at a compound annual growth rate (CAGR) of 3.4% through to 2018, with China (8.3% CAGR) and India (7.5% CAGR) doing best of all.

North America, by contrast, is forecast to fall at a CAGR of -4.2% during the continuing migration of advertising and readers to digital continues. Canada is expected to perform as badly.

And the western European countries - including the UK, France and Germany - will also see continued decline over the next five years despite digital innovation because, says the report, publishers will be "unable to fully monetise their readers' migration to online and mobile news."

PwC's annual global outlook provides a comparable source of advertiser spending data and commentary across 54 countries.

It forecasts that circulation revenue will almost match advertising revenue by 2018, noting that in 2013, global circulation revenue rose while advertising revenue continued to fall.

The report predicts that circulation's share of total revenue will therefore rise from 47% in 2013 to 49% by 2018, meaning that consumers may soon become publishers' biggest source of revenue.
As for digital payments, although they are taking off, they won't prove transformational. Digital newspaper circulation revenue grew by 66.2% in 2013, but these improved fortunes have not proved as profitable as publishers would wish.

It means that by 2018 digital circulation on a global basis will make up just 8% of total circulation revenue.
And there are signs that the growth in digital advertising revenue is slowing down. In 2013, publishers' annual digital advertising revenue growth reduced to 11.7% – a far cry from the 17.7% growth of 2012.

So the report states that publishers must work harder to realise new digital revenue returns by embracing new advertising technologies, promoting better usage measurement and exploring controversial content marketing and payment schemes.
One certainty: "digital-first" is becoming the norm for newspaper publishers across the world.

Magazine revenues set to improve from 2015 onwards

The PwC outlook report predicts that total magazine revenue will also resume growth in 2015 after years of decline. In 2018, it says, total magazine revenue will reach $98.1bn (£60.6bn), up from $97.1bn (£60bn) in 2013.
Global digital consumer magazine circulation revenue will rise at a 31.2% CAGR. As companies transform free access websites to paid-for editions, digital will move from 4% of total consumer magazine circulation revenue in 2013 to 14% in 2018. The report predicts that "all-you-can-read subscription services" will be transformational. Although they have yet to gain traction, it believes user numbers will soon reach critical mass.

And, of course, with growing magazine circulations will come rising circulation and advertising revenue.
But overall total consumer magazine circulation revenue will continue to decline because growth in digital circulation will not be enough to compensate for print declines.

So global consumer magazine circulation revenue will fall by a -0.7% CAGR to 2018. However, there are signs that the decline may level out in the long term, as the year-on-year fall in 2018 will be just -0.3%.
Emerging economies will witness the fastest growth in trade magazines, especially markets in China, India, Russia and South Africa.

Turkey and Hungary will also see strong growth in trade magazine revenues with CAGRs of 5.3% and 3.7%, respectively, while Peru, Venezuela and Argentina will all see growth of at least 6.8% CAGR, albeit from a low base.

 

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