CAMPAIGN REPORT ON TOP EUROPEAN NEWSPAPERS: Paper world - The European newspaper industry is fighting back after a ten-year slump, Tracey Taylor reports
By TRACEY TAYLOR, campaignlive.co.uk, Friday, 12 November 1999 12:00AM
Gatherings of the world’s top newspaper executives have tended to be rather gloomy affairs over the past ten years. Charts thrown up in presentations have demonstrated all too clearly the gradual global decline in newspaper circulations. The industry has faced a catalogue of threats: unfavourable economic conditions, a newsprint crisis in the mid-90s, the desertion of young readers, the proliferation of cable and satellite TV channels, and the internet, which has struck at the heart of classified revenues.
Gatherings of the world’s top newspaper executives have tended to
be rather gloomy affairs over the past ten years. Charts thrown up in
presentations have demonstrated all too clearly the gradual global
decline in newspaper circulations. The industry has faced a catalogue of
threats: unfavourable economic conditions, a newsprint crisis in the
mid-90s, the desertion of young readers, the proliferation of cable and
satellite TV channels, and the internet, which has struck at the heart
of classified revenues.
However, in June 1999, when the great and the good of the World
Association of Newspapers met in Zurich, the congress was in for a
surprise. The association’s director-general, Timothy Balding, said he
had ’clear evidence that newspapers are making a comeback after a tough
Newspaper publishers, it seems, have not resigned themselves to a bleak
future dominated by broadcast and digital media, and have instead taken
action to fight their corner.
WAN reports that after several years of decline, daily newspaper
circulations are on the increase or stabilising in many countries.
Advertising spend in newspapers has shown strong growth over the past
five years. And the press has boosted revenues and built a competitive
edge by learning to exploit the potential of electronic and
There is no doubt that newspapers will continue to face difficult
challenges in the future, but it appears the industry is now more
prepared to face whatever is thrown at it than before.
Jacob Arfwedson, research manager at WAN, says newspaper publishers have
gone through three stages since 1995. ’Five years ago the internet was
the big subject among newspaper owners. It was uniformly considered a
threat and the overriding question was ’how do we protect ourselves?’,’
he says. In 1996/7 newspapers embraced the new medium - sometimes a
little too eagerly, according to Arfwedson. ’They crammed as much as
possible, including the whole version of the print product, on to a
website,’ he says. ’Now newspapers have a more balanced perspective.
They see the internet as a good way to complement what they are doing in
Newspapers were the largest display medium until 1993 when television
began to take a bigger share of the advertising pie. Zenith Media
estimates that by 2001 newspapers will account for 32.5 per cent of
Advertising growth forecasts are low with just 1 per cent expected for
Europe by 2001 - about half the all-media rate. The figure is similar
for the US except that it can look forward to a boost in advertising as
a result of next year’s presidential election campaign.
In terms of sales, the big three markets - Europe, the US and Japan -
all tell similar stories. As Zenith reports: ’These markets are mature;
newspapers are not recruiting more readers and in the US, and EU,
existing readers are slowly devoting more attention to other media.’
Latin America has never been a strong newspaper region, not least
because of the higher than average levels of illiteracy. The press
manages only a 16 per cent share of adspend. However, as literacy and
distribution infrastructure improve, circulations have begun to
Asia presents an optimistic picture - in parts. Japan, one of the
world’s great newspaper nations with 577 sales per thousand population
each day, has been badly damaged by the economic crisis and publishers
have faced plunging profits. Elsewhere the Asian crisis seems to have
bypassed the industry. Although people may have had to tighten their
belts in countries such as Malaysia, Singapore and Indonesia, it seems
they were not prepared to sacrifice their daily papers. Each of these
markets respectively saw sales increases of 10.2 per cent, 2.8 per cent
and 6.4 per cent in 1998.
In Europe newspaper owners can be justifiably proud of their efforts to
fight back. Last year their slice of the total advertising pie increased
from 39.7 per cent to 40.1 per cent. Europe is home to some of the
world’s most competitive press markets and it has led the way in many
areas in clawing back sales and revenue share.
’One thing you cannot say is that European newspapers have been
sleeping,’ says Inge Van Gaal, public affairs co-ordinator of the
European Newspaper Publishers’ Association. Gaal says there are
countless examples of ways in which newspaper groups have taken action
to reverse their fortunes.
These include launching free ’commuter papers’ as pioneered by Kinnevik
in Sweden with the daily Metro. These free-sheets have proved to be
particularly popular among young people who appreciate a 20-minute read
with short articles and accessible design. ’Research shows that papers
such as Metro have not had an impact on paid-for newspapers. In fact, by
bringing in new readers they are increasing the market,’ Gaal says.
Other initiatives include web-based city guides, such as Associated
Newspaper’s internet site, thisislondon.com, creating high-quality
supplements which attract advertisers such as those produced by Spain’s
El Mundo or Le Figaro in France, and joining forces to combat the threat
to online income. In Belgium, for example, a group of newspapers and
magazines including Het Laatste Nieuws, De Morgen and Knack, have
created an internet company called Vacature, which puts classified ads
online. ’It is a very good site and proves that by forming partnerships,
newspaper publishers can come out stronger,’ Gaal says.
Finally, no discussion about newspapers is complete without mentioning
the impact of the widespread concentration of ownership. In the US, for
instance, few of the traditional family-owned papers have survived and
the situation has reached a point where big cities are often served by
just one title. This is good news for the bottom lines of publishers,
but raises inevitable questions about editorial independence. Indeed
such is the controversy surrounding this subject, it is possible that
the next time newspaper chiefs gather for their annual WAN summit, it
will be ethics rather than e-commerce which will top the agenda.
NEWSPAPER REACH IN KEY MARKETS (%)
South Africa 18
Notes: Reach = readership by all adults of daily newspapers.
* Average across four markets.
Source: World Association of Newspapers/Zenith Media.
TOP 10 NEWSPAPER MARKETS (share of adspend, 1998)
Rank Market Share %
1 Denmark 68
2 Luxembourg 65
3= Malaysia 58
3= Sweden 58
5 India 57
6= Finland 55
6= Iceland 55
8 Switzerland 54
9 Ireland 51
10 Netherlands 49
BOTTOM 10 NEWSPAPER MARKETS (share of adspend, 1998)
Rank Market Share %
1 Mexico 8
2 Portugal 9
3 Peru 10
4 Poland 11
5 Colombia 12
6= Cyprus 15
6= Greece 15
8= Hungary 17
8= Slovenia 17
8= Thailand 17
Source: World Association of Newspapers/Zenith Media.
This article was first published on campaignlive.co.uk
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