CAMPAIGN REPORT ON TOP EUROPEAN NEWSPAPERS: Paper world - The European newspaper industry is fighting back after a ten-year slump, Tracey Taylor reports

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

decade’.



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

internet-based media.



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

print.’



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

adspend globally.



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

rise.



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 (%)

Australia                       46

Brazil                          52

China                           57

Germany                         79

Hungary                         51

Indonesia                       54

Italy                           40

Scandinavia*                    85

South Africa                    18

Spain                           37

UK                              74

USA                             59

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.



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