As if we didn’t already know that the newspaper industry was in dire straights now comes a report showing that circulation fell faster in the U.S. than the rest of the world in the last three years.
From the Guardian
UK newspapers have suffered the most dramatic circulation declines of any country outside America since 2007, according to the Organisation for Economic Cooperation and Development.
A detailed study published by the OECD paints a bleak picture of the industry.
It found that UK circulation has fallen by 25% between 2007-09, second only to the US, where the decline was 30%. Greece (20%), Italy (18%) and Canada (17%) have also seen significant falls.
The report, The Evolution of News and the Internet, found that 20 out of 30 OECD countries faced declining newspaper circulations.
The growth of the global newspaper market slowed progressively from 2004 to almost zero in 2007, the OECD said, and has shrunk since 2008 – falling by 5% in that year – despite growth in countries in the developing worlds.
The falls were most pronounced in North America, which saw drops of 14% in 2008 and 18% in 2009.
About half of OECD countries experienced drops below 2004 levels, with the United States (-34%), the United Kingdom (-22%) and Japan (-18%) the worst hit.
The OECD reports that job losses in newspapers have “intensified” since 2008, particularly in the UK, US, the Netherlands and Spain.
Over the 10 years from 1997-2007, it says, the number of jobs in the US has fallen from 403,355 to 356,943, a fall of 12%. The decline has accelerated drastically since then.
The study says that newspapers are unlikely to disappear, however.
Although 2009 was the industry’s worst on record in OECD countries, the “potential positive effects” of the economic recovery in 2010 are already improving their commercial performance.
The study also found that more than half the population read news online in some OECD countries, including Korea, where 77% do so. Despite that, “the willingness to pay for online news remains low”.
It points out that: “The specialised press performs better than general newspapers”, online, citing the Wall Street Journal as an example.
Its also concludes: “Reading news online complements other forms of news rather than replacing it.”
It cites figures provided by the New York Times, which says about 70% of its 1.1 million registered online users are subscribers to its print edition.
The global newspaper market generates 57% of revenue from advertising, the OECD said, although that figure is far higher in many developed countries, most notably in the US, where newspapers are reliant on advertising for 87% of their income.
The figure is 50% in the UK, according to the OECD, and lowest in Japan (35%), which has some of the world’s bestselling newspapers and the highest levels of newspaper penetration.
Online advertising revenues accounted for a “minuscule” proportion of total newspaper revenues – just 4% in 2009.
News was a significant driver of internet traffic, however, with an estimated 5% of searches related to reading news online. The OECD described that as a “conservative estimate”.
Figures for the UK show that 25-35% of traffic to news websites comes from Google.
The report’s authors claimed that newspapersare burdened with fixed costs, which are dominated by non-editorial activities including promotion and distribution. That makes them particularly vulnerable to a downturn and “less agile” when trying to adapt to changes ushered in by the internet.
“Given the central role of news for democratic societies, the evolution of news creation and distribution are a matter of public interest”, the report’s authors say.
“The question is whether and how the production of high-quality and pluralistic news content can be left to market forces alone”.
As I have said before newspapers have been pounded by the internet where most of the news is available for free, short attention spans and a brutal recession that wiped out much of the industry’s ad revenues.
There is still a place for the printed page but it will be more for older readers or in the free weeklies that dot the landscape providing local news the larger papers don’t.
But until the larger papers can figure out how to monetize their internet assets they will continue to suffer financially as readers continue to abandon their print editions in favor of free alternatives.