Increased advertising spending and a focus on niche markets will slow revenue declines
Los Angeles, CA (PRWEB) October 22, 2013
Slowed consumer and print advertising spending is expected to persist through 2013, driving the Magazine and Periodical Publishing industry's revenue down an estimated 3.0% to $38.4 billion over the year. However, this decline is relatively mild compared with the average annual decline of 4.6% over the five years to 2013. Consumer and print advertising, the two main sources of revenue for magazine and periodical publishers, plummeted during the economic downturn. According to IBISWorld industry analyst Jesse Chiang, “As the economy rapidly weakened in 2009, companies that traditionally invested in advertising cut spending to maintain positive cash flows.” As a result, print advertising took a major hit. Meanwhile, consumer demand for publications contracted as many Americans cut discretionary spending when their disposable incomes declined, leading to a reduction in circulation and further hampering demand and revenue from advertising firms. As of 2013, neither print ad spending nor disposable income has fully recovered from recessionary declines.
In the five years to 2013, firms cut costs by closing offices, discontinuing unprofitable magazines and laying off employees. As revenue dropped, some businesses were forced to fold. Since 2008, the number of firms is estimated to decline at an average annual rate of 2.4% to 5,313 in 2013. Nonetheless, the industry has fared better than other print media since magazines and periodicals give advertisers access to niche audiences.
To retain an increasingly digitized readership and enable more focused advertising services, the industry is slowly shifting away from print publishing to digital. The improving economy will support slightly increased corporate spending on marketing, driven by an uptick in sales as customers' pocketbooks recover. “Companies that can successfully navigate the changing tides in consumer preferences and market trends will come out ahead because they will be able to complement their print products and expand their audience,” says Chiang. Still, escalating competition from new media, decreasing subscriber numbers and less business from advertising will continue to cut into industry revenue. As a result, revenue is forecast to decrease over the five years to 2018.
For more information, visit IBISWorld’s Magazine & Periodical Publishing in the US industry report page.
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IBISWorld industry Report Key Topics
The Magazine & Periodical Publishing industry produces and distributes magazines and periodicals in print and online. However, publishers that exclusively sell online magazines or periodicals 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
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