Here are a bunch of charts and reports about the newspaper market worth looking at side by side.

On one hand, an OECD report (via a post by Erina Lin in sfnblog) again confirms that in the UK and US the newspaper market is in a steady period of decline.   And on the other hand, an article in AdAge, shows that digital revenues almost certainly aren’t making up the losses.

The OECD shows that between 2007-2009 not a single member country saw an increase in the newspaper market.  Note, that the OECD’s definition of the newspaper market is: “Online and offline circulation and advertising revenues of traditional newspaper publishers” – in other words everything that traditional papers do to make money.

The US (-30% decline) and the UK (-21%) very much led the way, though among English speaking countries, Australia bucked the trend, ‘only’ seeing a 3% fall in the same period.

Here is another chart from the same report showing that while seniors are still most likely to read a paper, the % who regularly read a newspaper in the US has been going down among all age groups.

50% of UK newspaper revenues down to sales
Though the US and UK lead the world in their shrinking newspaper industries, they are affected in different ways.

With 50% of revenue coming from circulations, UK newspapers are more at risk from changing demographics, with younger consumers in particular not being in the habit of buying a morning paper.   With 87% of revenue coming from advertising, US publishers have by comparison been hit harder by the general economic downturn.

US Newspapers now only have 30% of the digital advertising pie
However, circulations and ad revenues are clearly linked, and here is the bad news.

From the AdAge article, ‘Mounting Web Woes Pummel Newspapers’, US Newspapers are not succeeding in getting a decent share of the whole digital advertising pie.   Even as digital advertising as a whole increases in value, US papers’ share of the total has gone down to around 30%.

In fact, writing on Australian Marketing website Mumbrella over a year ago, journalism professor Stephen Quinn pointed out that while classified advertising used to represent 40% of newspaper profits back in 2000, thanks to the likes of Gumtree and Craigslist, that total had gone down to 23%.

More tellingly, Professor Quinn said that when looking at the New York Times, its online advertising revenues would only pay for a fifth of its news gathering budget.

Before we start writing off newspapers completely though, there are another set of figures from the OECD report worth looking at.  While the OECD countries saw their newspaper markets decline, when you look at emerging markets such as South Africa, India, China and Brazil, a completely different picture emerges.

While circulations in OECD countries went down year by year from 2003-2008 in the so-called BIICS (Brazil, India, Indonesia, China, South Africa) they steadily went up.    To take India as just one example, the % that regularly reads a newspaper went up from 17% in 2003 to 37% in 2008.

As a result, worldwide – certainly outside of the minority of countries where Internet penetration is 50% – the newspaper industry is actually a growth industry.

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