Newspaper ad revenue might not be quite up to speed for overtaking print, but it…
The future for print media is a mix of ups and downs that are standard fare for most business analysts. Despite the fact that millions of people get information for free from the Internet on a regular basis, there is still room for print newspapers and magazines to survive. Recently, PricewaterhouseCoopers (PwC) released a report that states that the future looks much brighter for magazines than it does for newspapers throughout the United States and around the world.
Magazines Are Staying Stable
Magazine revenues from 2014 to 2015 are expected to climb by $100 million from $24.6 to $24.7 billion, which is much better than posting losses. Combined advertising revenues for the magazine industry are expected to come in at $17 billion for 2015, which represents essentially no growth from 2014 to 2015.
Over the next four years, magazine circulation revenue is expected to fall, but only at a pace of one-half of a percent. The $7.7 billion in circulation revenue magazines enjoy now is expected to stay relatively flat for the coming four years.
Newspapers Will Struggle
The long-term outlook for newspapers is a bit darker as PwC predicts a total loss of $5 billion in advertising revenue for newspapers from the period of 2010 to 2015. By 2019, that number is expected to fall to $16 billion. Digital advertising rates are expected to jump by 3.4% percent by 2019, but that is not going to be enough to offset the tremendous losses in print advertising.
The issue for newspapers is that digital advertising is not enhancing the print advertising revenue. Digital advertising represents less than one-third of all newspaper advertising and it is not enough to keep up with the dramatic losses in print advertising. One positive thing for newspapers to look forward to is a growth in circulation revenue from $11.4 billion in 2015 to $12 billion in 2019. Once again, this is not nearly enough to offset the losses in print advertising.
Companies Are Re-Evaluating Their Advertising
According to the Wall Street Journal, companies that hold a combined advertising buying power of $20 billion (companies such as Procter & Gamble, Coca-Cola, and Unilever) are all reconsidering how their advertising is done. Procter & Gamble alone announced that it is looking to reduce its advertising spending by $500 million per year by eliminating the number of advertising agencies it works with. At some point, this reduction in advertising spending is going to affect magazines and newspapers and give momentum to the losses the print industry is expected to take.
There are tough times ahead for newspapers and magazines, but especially for newspapers. The analysts at PwC admit that the increase in circulation revenue would primarily be to an increase in subscription rates for both printed newspapers and digital paywalls. The report does not indicate a lot of confidence for the paywall business model, which could mean that newspapers will have to completely rethink the way that they do business if they want to survive in the long-term.