EUROPEAN NEWSPAPERS: EUROPE'S TOP PAPERS

Newspapers are finding larger and larger markets, but only in the developing world, and more readers don't translate into more ad revenue, as Adam Smith explains.

The combined circulation of daily newspapers across all the countries for which we have data is increasing, as, in the long term, is the total number of titles. Between 1997 and 2001 total circulation rose by 4.8 per cent, and the number of titles rose by 8.2 per cent.

Almost all of this growth is taking place in the developing world. In advanced economies such as Japan, the US and the European Union, the opposite applies, circulations are falling, and so is the number of titles. These trends have been evident for years. In developing markets, rising population, literacy and wealth increase the supply of readers, while in mature markets young people turn to other media, such as television and the internet, for news and information.

The average circulation of daily newspapers varies wildly across the world. It is highest in Japan, at 676,400; the next highest average circulation is about half that, at 346,000, in Thailand. The world average is 72,000, and the averages in the EU and the rest are very close to this, while the average in the US is about half, at 37,900. With the world's two largest economies almost at the opposite end of the spectrum, there is clearly no direct link between the size of a country's economy and the average circulation of its newspapers. Instead, it seems to be simply a matter of taste: in some countries, readers like to get their news from large national titles, while in others readers prefer small newspapers with local identities.

The Zenith Optimedia Group regularly collects data on ad expenditure in 57 countries. 2001 was the worst year for global newspaper advertising on record - it dropped by 4.1 per cent, or 7.2 per cent after stripping out the effects of inflation. The recession in advertising, caused by a collapse in corporate profits and confidence, began in the US and spread quickly across the world. The main reason this advertising recession was so much sharper than the previous one in 1991, when newspaper expenditure fell 1.5 per cent, is that the world's economies and their ad markets are now much more closely interconnected.

The last ad recession started in the US in 1989, hit Europe in 1990 and didn't reach Asia until 1991.

Publishers can draw comfort from the fact that at least newspapers fared no worse than any other medium. In fact, 2001 was the first year in which newspapers' share of the world ad market stayed static since 1987. For many years, newspapers have been losing share to other media, particularly television, as broadcast markets have deregulated and more people in the developing world have acquired television sets. However, newspapers have some useful advantages over television during a recession - it is much easier for them to adjust their advertising volumes to manage prices, and with their short lead times they are the natural home for price promotions and short-term tactical campaigns. We doexpect newspapers' market share to resume its decline in 2002, but do not yet forecast it to fall below 30 per cent.

The world's economies seem to be picking up after the slowdown of 2001, but we are forecasting further decline in newspaper ad expenditure for 2002, followed by weak growth that will be wiped out by inflation in 2003.

This is the nature of the advertising cycle: it outperforms the wider economy in periods of steady growth, but underperforms in a downturn and then takes longer to recover. We don't expect newspaper ad expenditure to return to real growth until 2004.

It is now quite clear that the internet poses no threat to the continued existence of newspapers. Quite the contrary: newspapers find it a useful tool for attracting new readers and providing new services to existing customers. While dotcoms were burning through their venture capital with unworkable business plans, plenty of publishers were setting up sites that extended their brands without huge investment.

As dedicated suppliers of information, often with sophisticated databases of loyal customers, newspaper publishers are ideally suited to take advantage of the opportunities the internet offers. Most publishers are likely to find that their internet businesses will remain very much secondary to their hard-copy newspapers, though. It is proving difficult to persuade readers to pay to read content online, though there have been a few honourable successes, such as The Wall Street Journal. Internet advertising is headed towards a 5 per cent share of the ad market, which is respectable, but nowhere near newspapers' share.

Turning to the UK, we need hardly repeat that circulation and readership are in chronic decline, but this trend is noticeably none the worse for the internet's intrusion over the past five years. Daily circulation has dropped 10 per cent in ten years to 12.9 million, and Sunday circulation has dropped 17 per cent to 113.7 million. On the whole it is the tabloids that have suffered in the past ten years, while circulations of the mid-market titles and the broadsheets have fallen more slowly.

Overestimation is also a problem; many titles rely heavily on bulk sales and lesser-rate sales to make their circulation figures look healthier, but these can be misleading and can mask sharp declines in a title's popularity.

UK newspaper owners' tendency to give their profits away in price wars leaves them to rely more heavily on advertising income, which comprised 43 per cent of their income in 1990 and 58 per cent in 2000. The advertising slowdown has bitten correspondingly harder.

Over the past decade, growth of display advertising has been comparatively slower than growth of classified (for which there was no directly alternative medium until the internet), so classified has risen as a proportion of spend. In 1994 classified contributed 19.0 per cent of spend; by 2000 it contributed 24.2 per cent. However, classified is much more sensitive than display to lean economic periods - it totalled £499 million in 2001, representing the first drop since 1992. It will come back eventually, although many eyes will watch with interest how "sticky" the internet proves to be for this purpose.

TOP 100 EUROPEAN DAILY NEWSPAPERS (2001)

NO COUNTRY TITLE/(FORMAT) PUBLISHER Circulation Reader-

ship

(000) (000)

1 Germany Bild Axel Springer 4,396 11,530

(Tabloid) Verlag

2 UK The Sun News Group 3,473 9,408

(Tabloid) Newspapers

3 UK Daily Mail Associated 2,477 5,678

(Tabloid) Newspapers

4 UK The Daily Mirror MGN 2,188 5,712

(Tabloid)

5 Austria Neue Kronen Zeitung Krone-Verlag 1,035 2,958

(198x265)

6 UK The Daily Telegraph Telegraph Group 1,021 2,284

(Broadsheet)

7 UK Daily Express Express Newspapers 958 2,004

(Tabloid)

8 N'lands De Telegraaf Holdingmij. 807 2,160

(Broadsheet) De Telegraaf

9 Russia Komsomolskaja Pravda ID Komsomolskaja 785 2,168

(Tabloid) Pravda

10 France Ouest France Ouest France 760 2,225

(Berlinois)

11 UK The Times News International 720 1,659

(Broadsheet) Newspapers

12 Italy Corriere della Sera RCS Editori 715 n/s

(Broadsheet)

13 Italy La Repubblica Gruppo Edit. 654 n/s

(Tabloid) L'Espresso

14 UK Daily Star Express Newspapers 620 1,572

(Tabloid)

15 UK Daily Record

(Scotland) Scottish Daily 566 1,559

(Tabloid) Record and Sunday

Mail

16 France Le Parisien/

Aujourd'hui Groupe Amaury 485 2,056

(Tabloid)

17 UK Financial Times The Financial Times 479 633

(Broadsheet) Group

18 Turkey Hurriyet Hurriyet Gaz. ve 476 2,112

(Broadsheet) Matb.

19 Finland Helsingin Sanomat Sanoma Osakeyhtio 446 1,150

(Broadsheet)

20 Italy La Gazzetta dello

Sport RCS Editori 445 n/s

(Broadsheet)

21 Spain El Pais Diario El Pais 436 1,471

(Tabloid)

22 Germany Suddeutsche Zeitung Suddeutscher Verlag 436 1,140

(Nordisch)

23 Germany Rheinische Post Reinisch-Bergische 418 1,200

(Rheinisch) Druck & Verlag

24 Italy Il Sole Il Sole Group 414 n/s

(Broadsheet)

25 Russia Rossijskaja Gazeta Rossijskaja Gazeta 411 n/s

(Broadsheet)

26 Italy La Stampa Edit. La Stampa 409 n/s

(Broadsheet)

27 Germany Frankfurter

Allgemeine Zeitung Frankfurter 409 900

(Nordisch) Allgemeine Zeitung

28 UK The Guardian Guardian Newspapers 408 1,104

(Broadsheet)

29 Spain Marca Recoletos 403 2,194

(Tabloid)

30 UK Evening Standard Associated

(London) Newspapers 402 973

(Tabloid)

31 Sweden Aftonbladet Aftonbladet Hierta 402 1,363

(Tabloid)

32 Germany Freie Presse Chemnitzer Verlag- 401 1,010

(Rheinisch) & Druck

33 France Le Progres/Lyon

Matin Le Progres 393 1,229

(Broadsheet)

34 Turkey Posta Simge Yayincilik 390 1,245

(Broadsheet)

35 Norway Verdens Gang Verdens Gang 388 1,345

(Tabloid)

36 France L'Equipe Groupe Amaury 387 2,619

(Broadsheet)

37 Germany Augsburger Allg./ Presse Druck &

Allgauer Ztg. Verlags/Allgauer

(Rheinisch) Z'gsverlag 367 1,041

38 Sweden Dagens Nyheter Dagens Nyheter 361 937

(Broadsheet)

39 France Le Figaro Le Figaro 349 1,386

(Broadsheet)

40 France Le Monde Le Monde 348 1,993

(Berlinois)

41 Germany Sachsische Zeitung Dresdner Druck & 340 880

(Rheinisch) Verlagshaus

42 Czech Rep Mlada Fronta DNES MAFRA 338 1,171

(Berline)

43 Turkey Milliyet Milliyet Gazetecilik 337 1,289

(Broadsheet)

44 France Sud Ouest Sud Ouest 337 1,319

(Broadsheet)

45 N'lands Algemeen Dagblad PCM Uitgevers 335 1,021

(Broadsheet)

46 N'lands De Volkskrant PCM Uitgevers 335 741

(Broadsheet)

47 Sweden Expressen AB Kvallstidningen 334 1,242

(Tabloid) Expressen

48 Czech Rep Blesk Ringier CR 333 1,076

(Broadsheet)

49 Germany Mitteldeutsche

Zeitung Mitteldeutsche Druck

(Rheinisch) & Verlagshaus 332 970

50 Germany Nurnberger

Nachrichten Verlag Nurnberger 325 893

(Tabloid) Presse

51 France La Voix du Nord La Voix du Nord 320 1,122

(Broadsheet)

52 Turkey Sabah Sabah Yayincilik 314 1,673

(Broadsheet)

53 Switz Blick Ringier AG 309 739

(Broadsheet)

54 Germany Neue Osnabrucker Neue Osnabrucker

Zeitung Zeitung 308 820

(Broadsheet)

55 Germany Leipziger Axel Springer

Volkszeitung Verlag 305 708

(Broadsheet)

56 Bulgaria Trud WAZ 300 1,350

(Tabloid)

57 Austria Kleine Zeitung Kleine Zeitung 293 818

(212x285)

58 Italy Il Messaggero Edit. Il Messaggero 293 n/s

(Broadsheet)

59 Spain ABC Prensa Espanola 292 849

(Tabloid)

60 Spain El Mundo del Siglo

XXI Unidad Editorial 291 1,016

(Tabloid)

61 Germany Hamburger Abendblatt Axel Springer Verlag 288 781

(Broadsheet)

62 Belgium Het Laatste Nieuws/

De Nieuwe Gazet Aurex 287 951

(Belge)

63 Germany Munchen Merkur Munchener 283 1,016

(Rheinisch) Zeitungsverlag

64 Hungary Metro Adoc-Semic 281 502

(Tabloid)

65 Italy Corriere dello Sport Corriere dello Sport 281 n/s

(Broadsheet)

66 Switz Tages-Anzeiger TA-Media 268 566

(Broadsheet)

67 N'lands NRC Handelsblad PCM Uitgevers 267 529

(Broadsheet)

68 Germany Volksstimme Magdeburger Verlags 264 604

(Broadsheet) & Druckhaus

69 Austria Kurier Kurier Zeitungsverlag 263 846

266x400 & Druckerei

70 Norway Aftenposten Morgen Aftenposten 263 738

(Broadsheet)

71 France Le Dauphine Libere Le Dauphine Libere 256 843

(Broadsheet)

72 Germany Die Welt Axel Springer Verlag 255 520

(Broadsheet)

73 Turkey Turkiye Ihlas Matbaacilik 255 979

(Broadsheet) Gaz Yayincilik

74 Sweden Goteborgs-Posten Goteborgs-Postens 254 596

(Broadsheet)

75 Germany Die Rheinpfalz Stuttgarter Zeitung 247 706

(Broadsheet)

76 France NRCO NRCO 247 677

(Broadsheet)

77 Italy Il Giornale Soc. Europea di 233 n/s

(Broadsheet) Edizioni

78 Russia Izvestija Redakcija Gazeti 232 453

(Broadsheet) Izvestija

79 UK The Independent Independent News 231 545

(Broadsheet) & Media

80 Germany Ruhr Nachrichten Medienhaus Lensing 225 477

Rheinisch

81 Croatia Vecernji List Vecernji List 220 660

(Tabloid)

82 Finland Ilta-Sanomat Sanoma Osakeyhtio 219 920

(Tabloid)

83 Germany Westdeutsche Zeitung Westdeutsche

Plus Zeitung Plus 214 534

(430x596)

84 Czech Rep Pravo Borgis 213 656

(Broadsheet)

85 France L'Est Republicain Is Mediae 211 696

(289x440)

86 France La Montagne Centre-France 210 623

(366x500)

87 Belgium Het Nieuwsblad/

De Gentenaar VUM 206 709

(Belge)

88 France La Depeche du Midi La Depeche du Midi 206 551

(374x527)

89 N'lands De Gelderlander Wegener 202 459

(Broadsheet)

90 Turkey Zaman Feza Gazetecilik 201 543

(Broadsheet)

91 Hungary Nepszabadsag Nepszabadsag 200 603

(Broadsheet)

92 Germany Markische Allgemeine Munchener 198 565

(Rheinisch) Zeitungsverlag

93 Germany Berliner Zeitung Gruner & Jahr 197 529

(Broadsheet)

94 Germany Schwabische Zeitung Schwabische Verlag 194 543

(Rheinisch)

95 Norway Dagbladet AS Dagbladet 194 796

(Tabloid)

96 Germany Frankfurter Druck & Verlagshaus

Rundschau Frankfurt am Main 192 426

(Broadsheet)

97 Spain La Vanguardia La Vanguardia 192 613

(Tabloid)

98 Germany Ostsee-Zeitung Axel Springer Verlag 191 477

(Rheinisch)

99 Bulgaria 24 Hours WAZ 190 850

(Tabloid)

100 Germany Braunschweiger Braunschweiger

Zeitung Zeitung 189 503

Berliner

Source: Zenith Optimedia Group.

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