If you are reading this on-line, then the title partly substantiates its content. The consumption of the digital media and the way people consume news through magazines or newspapers has changed drastically, the average time spent by a user on a handheld device for consuming online content has risen from 18 minutes in 2008 to 3 hours in 2015 (Source: eMarketer).
The dawn of smartphones and tablets coupled with the growth in 4G subscriber base has seen a surge in digital penetration globally from 12.5% to 52.7% during 2010-15 (Source: GSMA Intelligence). In 2015, print readership for newspapers stood at 2.7 billion readers globally, while its digital counterpart reached almost half that number in less than a decade. In other words, while newsprint circulation has grown at a CAGR of 4% in the past 5 years, digital readership has grown by a whopping 97% in the same period (Source: World press trends 2015), similar trends were observed in the magazine readership.
Source: World Press Trends 2015
The advancement of technology and digital readership has considerably altered the playing field for all the members in the publishing ecosystem, including advertisers, marketers and the publishing companies. The advertisers are widely opting for digital media to reach to the global audiences. The publishing firms are investing heavily on their digital platforms, in order to attract additional subscribers, in their pursuit to stay in the business. However, publishing companies have not been in a position to truly capitalise on the digital growth as is evident from the following facts.
From 2011 to 2015, the global digital ad expenditure has increased from $81.54 bn to $146.62bn (Source: Statista) with a CAGR of 16% over the 5-year period. The digital ad revenue accounted for mere 1/4th of the total advertising revenue in the publishing industry, this means that print continues to remain the dominant force. However, it should be noted that revenue contribution by digital media has been continuously increasing (from 8.8% to 11.7% of total revenues) albeit at a gradual rate. The slow growth in digital revenue despite the humongous increase in digital readership stems from multiple reasons such as:
1) Availability of free content impacts digital circulation revenues. Most newspapers and magazines provide digital copies of their bestselling print publications for free. This makes the digital platform an add-on complimentary service rather than a revenue generating source.
2) Most websites provide an ‘ad-blocking/pop-up blocking’ features to their users, thus, limiting the potential of digital ad revenue.
3) Subscribers use a trial version, but are generally reluctant to buy a paid edition, mainly owing to the wide availability of free content. This poses a huge challenge in converting digital readers to paid subscribers, hence limiting the contribution of digital media in the publishing industry.
Source: Televisory’s Reports
Further, a comparative analysis of the top newspaper companies: New York Times, A.H. Belo and The Economist with their average revenue per circulation (both print and digital combined), average cash cost per circulation and average EBITDA per circulation from 2012-15 has been shown in the below graph.
Select Operational Metrics of The NY Times, A.H Below, The Economist(USD)
Source: Televisory’s Reports
Thus, from the above data, the growth in all the metrics has either been falling or are almost stable in the four-year time span. The quest for scalability and adaptability to the structural changes in media has driven the companies to invest and innovate in the digital space. This, in reality, has not transformed into tangible revenue until now.
The print media is robust across the publishing industry, but it is declining year after year across all markets, this suggests that digital is the future. However, the digital space has not evolved to the consumer demands as rapidly as it was predicted and is adding to the woes of the publishing companies. The firms have been unable to monetize the millions of unique visitors. Therefore, it is safe to assume that though the print continues to decline, but still, dominate the publishing industry.