State of the market
With the ever changing digital landscape, it is no surprise media consumption has changed dramatically. In May we reported that News.com.au moved all of it’s 112 community and regional print titles to digital news sites only, and closed down 36 titles altogether. Then in June, Bauer closed down all of its magazine production in Australia. PWC reports that newspaper advertising is forecasted to decline 20% by 2023. That report was prior to these closures so that figure is sure to look even bleaker now.
Changing media consumption
Many in the market are blaming Facebook & Google for ‘stealing’ newspapers revenue, as users media consumption moved to these channels rather than the news site itself, let alone even think about buying a physical newspaper.
However, this is not the sole contributing factor to the demise of print:
- Reduction in classifieds: ever used eBay? Or gumtree, Carsales or AirTasker? Yes, highly likely. These all represent the $1.3 billion decline in classified advertising across newspapers, a huge gap in revenue not made up for in digital display revenue which sites at a mere $0.1billion.
- Rise of consumption on the go: As Apple introduced the iPhone in 2008 and news to our fingertips, slowly and naturally we as consumers begin reading the digital versions of our favourite newspapers. Coupled with the rise of diversified classified sites we can access from our phones, means that we moved away from newspapers gradually.
- Paywalls aren’t effective: despite the introduction of paywalls, the revenue from subscriptions are nowhere near enough to cover the gap in print advertising
- Varying digital & print pricing models: although digital circulation of news has increased 307% in the last 5 years, the pricing of advertising across digital is low per thousand than print. In other words, news sites have to sell an awful lot more digital advertising to make up for the drop in print advertising.
It’s very easy to point the finger at Google and Facebook for stifling traffic to news sites, leading to declining advertising revenue, and the key in newspapers decline but when it comes down to it, it’s not all black and white.
You can read the full research by Accenture here: https://alphabeta.com/wp-content/uploads/2020/09/australian-media-landscape-report.pdf