Publishers will look to online subscriptions and mobile platforms to offset major declines
Los Angeles, CA (PRWEB) May 19, 2012
The Newspaper Publishing industry faces escalating competition from other forms of media, particularly web-based outlets. Consumers favor the real-time reporting capabilities of online news outlets, including social networking platforms like Twitter. As a result, advertisers are spending less money on print and more on building an online presence, where they can create customizable campaigns and reach more consumers. The recession aggravated newspapers' diminishing readership and advertiser appeal, forcing loyal readers to unsubscribe and advertisers to slash budgets. IBISWorld industry analyst Agata Kaczanowska says many of these advertisers have not returned to print media; instead, they have funneled ad budgets toward online outlets. Over the five years to 2012, the Newspaper Publishing industry's revenue is expected to decline at an average annual rate of 8.1% to $33.8 billion. In 2012, IBISWorld estimates revenue will decline as publishers continue to lose readers and advertisers to other media.
Steep revenue declines and easy data-sharing methods have caused many newspaper publishers to syndicate a larger part of their content. Syndication has allowed companies to restructure, resulting in significant layoffs over the past five years. During this time, staff numbers are expected to decrease over five years to 2012 to 227,469 employees. The top players in the Newspaper Publishing industry are Gannett Co. Inc, the Tribune Company, and the New York Times Company. Over the past five years, industry concentration has declined, in part due to pressures imposed by the post-recessionary drop in advertising. Individual firms tend to be small, and large firms have become less prominent on the national level. Big companies sold unprofitable ventures during the recession in order to keep positive profit margins, says Kaczanowska. Nonetheless, concentration is very high in some geographic markets and in specific product market niches, such as financial newspapers.
Nonetheless, cost-cutting measures did not fully counteract shrinking revenue, resulting in tightly squeezed profit margins. Profit, or earnings before interest and taxes, is anticipated to decline over the five years to 2012. However, profit is projected to stagnate in dollar terms and increase over the five years to 2017 as high corporate profit helps sustain the number of professional subscriptions to newspapers. To slow the exodus of advertisers, newspaper publishers plan to incorporate online subscriptions and bundles into readership statistics that advertisers use to judge a newspaper's demographic. Also, publishers must work to establish themselves on mobile platforms to make newspapers more accessible to readers. While newspapers will attempt to become more accessible, they will be unable to retain the same amount of advertising revenue as the number of online news sources grows. Over the five years to 2017, IBISWorld forecasts an annualized revenue decline. For more information, visit IBISWorld’s Newspaper Publishing in the US industry report page.
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IBISWorld industry Report Key Topics
The Newspaper Publishing industry produces and distributes print newspapers. Companies that solely publish online news are excluded from this industry.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
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