Are newspapers becoming old news?

We are over halfway through 2020. Tiger King and Trump’s impeachment acquittal seem distant. The remainder of 2020 will be interesting as America goes to the polls and the fallout from Brexit continues to make headlines. And it is those headlines that Britain’s newspapers hope will bring back readers and in turn, revenue as we debate whether newspapers are becoming old news.

Depending on who you talk to, print newspapers are going through their final rattle or simply finding a place in a new, broader interdependent media landscape. The truth is, Britain’s newspapers are in decline.

The graph below shows the annual expenditure on newspapers in the UK from 2005 to 2019, based on volume. Over this period consumption of newspapers has decreased. In 2005 UK households purchased approximately 7.2 billion pounds worth of newspapers, almost 4.5 billion pounds more than in 2019. It shows that a decline in spending on newspapers has been happening for a long time.

 

 

Not only is consumption expenditure on newspapers falling, so are circulations.  This graph shows the newspaper market ranked by year-on-year growth as of August 2019. The Daily Star Sunday had the highest decrease percentage of 18.8 percent in 2019 on 2018.

 

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And it’s not just consumers who are spending less on newspapers. As circulations fall, advertisers are spending less.

Between 2011 and 2019 newsbrand advertising revenue fell by 1.48 billion pounds. The forecast for 2020 shows a further decline.

 

 

The coronavirus pandemic is only going to further these declines. Publishers like Reach plc (the publisher of titles such as the Daily Mirror, Western Mail, Express and Daily Star) have furloughed large swathes of ad-sales staff.  Many have furloughed their journalists. Some of the newsbrands have taken 10-15% pay cuts, rising to 20% for board members and it’s fair to say that newspapers have become noticeably thinner.

According to forecasts from WARC and the AA, newspaper and magazine advertising expenditure will see a large decrease in growth in 2020. The coronavirus pandemic will impact the industry hard, with online newsbrand advertising suffering only slightly less than printed newspaper and magazine advertising.

 

 

However, unlike some industries (think tourism, sports, and charities) that have been severely affected by the pandemic, news providers are seeing a surge in demand for their content – it just happens to be online. Website traffic across the board has risen and in a recent survey by GlobalWebIndex, when asked where people look for advice on the coronavirus outbreak, news outlets placed second after the NHS website.

Online subscriptions for some titles have seen a boost but physical paper sales which still tend to dwarf digital subscriptions, have collapsed and revenue from online ads is significantly different to revenue from print ads. 

The pandemic will only accelerate trends that have been taking place for some time. Ad revenues have been falling for years, print readers have been moving online (or dying of old age!). Even before the virus hit, Telegraph Media Group saw profits plummet.

So what happens when the lockdown comes to an end? According to Enders Analysis, in 2009 print advertising revenue fell by 25% before returning to levels before the decline. The worry is that this time around, 40-50% of what is lost, may never come back. The same is said of circulation. 

If people are getting out of the habit of picking up a paper then it will be difficult to come back from that. 

The truth is, none of us are absolutely sure about the future of print as a format and of the future viability of print advertising. We know it works right now. Having said that, it pays to keep an open mind.  The pandemic has seen a surge in new digital subscriptions. If the publishers can keep hold of these new audiences, they might form a silver lining to the cloud hanging over the newspaper industry at the moment.

The numbers make the situation perfectly clear. If the trend continues, the UK’s press could be facing extinction in the long term and whilst it sounds like we’re jumping on the bandwagon that always seems to be pre-empting the death of newspapers, it’s important to remember that as Clay Shirky, an American writer on the social and economic effects of Internet technologies said, when commenting on newspapers, “Constant speculation does no-one any good, but nor does the fantasy that this is anything but hospice care.”