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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• Honesty in the age of the paywall (charman-anderson.com)
• Report: Online Ad Revenue Will Soon Surpass Print (readwriteweb.com)

Next week The Times and Sunday Times join the FT in becoming UK newspapers behind a paywall where it will cost you ?2 a week or ?1 a day to access the articles.

The Independent asks whether it will pay off and what proportion of online users will vanish.   News International’s management freely admits that a large chunk of visitors will disappear, but according to Tristan Davies of the Sunday Times, “the business end of the company decided it was better to have a quality relationship with an audience than one based on quantity.”

With the other UK nationals (the FT aside) and the BBC continuing to provide online news for free and with online news arguably being a commodity, the Independent points out that the challenge will be to make subscribers think they are getting something they won’t get elsewhere.

Though advertising revenues don’t as yet cover online news budgets, the Telegraph for one has adopted a different model for making money online.

According to a Paid Content article last year, 20-30% of online revenues come from a core of 2-3% of users who buy into extras such as the Telegraph’s fantasy cricket and football games and the Clued Up puzzle service, which charges ?2.99 a month for basic subscription

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• Murdoch’s paywalls are to protect print, says Guardian MD (newstatesman.com)
• Before The Paywall, Murdoch Stops Disclosing UK News Site Traffic (paidcontent.org)

While the New York Times reports that 2009 was officially the worst year for the newspaper industry in ‘decades’, journalism blogger and pundit Alan Mutter says 2010 could be even worse.

Three US based stats from Alan’s blog:

1 – Classified advertising is down a massive 64% from the $17.3 billion it brought US papers in 2005.  Thanks Craiglist, and in the UK, the likes of gumtree

2 – Retail advertising was down 36% over the same period

3 – National advertising was down 44% since 2005

The problem is of course also a demographic one.   Apparently in the US, the average age of newspaper readers is 55+ as shown in the video below (via Steveouting.com).

And the UK probably isn’t too different in that respect, a Parliamentary Committee two years ago found that newspaper readership fell 40% among 25-34 year olds, but rose by 4% among 55-64 year olds – and if anything that trend will have increased over the past two years, given that the UK nationals have lost more than the population of Wales in readers since then.

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• Times editor: ‘We are going to lose a lot of passing traffic’ (guardian.co.uk)
• Audience for print newspapers will shrink faster than Alan Mutter predicts (trueslant.com)

Was the subject of a presentation I gave at today’s Social Media World Forum at Olympia (London).

With me having, perhaps too ambitiously, crammed in both SXSW and this event in one week, I’m aware that I rattled through this at great speed – or as one tweet put it – presented an information red bull!

As a result, the presentation is embedded above.   I’ve also included supplementary points / facts / stats with links below:

• Demand media pushes out 4000 pieces of content a day - an article from Wired that’s a good intro to possibly the largest and most notorious of the content farms
• UK national newspapers have lost 1.2 million in the past two years (slide six).  I compiled the table from the ABC figures Jan 08, 09 and 10.  3.1 million lost readers is more than the population of Wales
• Since 1951, the UK population has increased by 25% but newspaper circulations have gone down 30%
• 96% of ‘new’ news is broken by the legacy media
• The latest Pew State of the Media report, out yesterday and worth reading, it includes some good (and recent) pointers about the direction the media as a whole (and not just newspapers) is heading
• Danny Sullivan’s interview with Eric Schmidt of Google, where Schmidt speaks up for the essential role major newspapers have in society
• Most journalists consult blogs for research – according to George Washington University and Cision
• PwC in a report last year said we should stop talking about the death of newspapers and talk about the rise of media brands

Any other questions, please do email me (dirk at the rabbitagency.com)!

Kirk LaPointe’s media blog points us towards this report by the Project for Excellence in Journalism, which takes a look at news consumption in the United States.

Bearing in mind that the whole death of print trend is arguably more advanced in the US than in the UK or Australia, it’s worth a look.   Key points:

• The young are least likely to be regular news consumers.  35% of 18-29 year olds follow the news all or most of the time.   For people aged 65+ that rises to 70%

• However, it’s impossible to blank out the news completely and 99% of Americans do admit to getting news, at least casually in some shape or form.   Local (78%) and national (73%) TV leads, followed by the Internet (61%).   By contrast, 50% read a local paper, 54% listen to the radio, while 17% read a ‘national’ newspaper (the latter stat would be different in say the UK, due to the stronger position of national newspapers)

• News is also consumed across several channels simultaneously, 46% of Americans use between four of the six news platforms

The report also looks at Internet news consumption in more detail.    Less than four in ten (38%) Americans rely solely on news from offline sources, the majority (59%) rely on both on and offline sources, while 2% only get their news online.   It’s worth remembering however that ‘offline’ includes TV and radio as well as print.

Tying into some of the stats mentioned above, the research found that online news consumers were by and large both better educated and younger than the average.    So, the median age of all news consumers was 58, but for people who get their news online it was 40.

Finally, and this is a stat we mentioned in the recent ‘Rabbit Feed’ (our weekly newsletter over at Rabbit), news is now much more of a social phenomenon.   Three quarters (75%) of adults that get their news online say they get it forwarded to them through email or social media.

And it works in a virtuous circle.   News gets forwarded online via social media from people who at the same time deepen their engagement with the news.  97% of American social network users read the news online, and 51% of that 97% get news forwarded onto them via friends on places like Facebook on a typical day.

Strengthening the role of Twitter as a network that has influence and importance beyond its 10-15 million worldwide active user base, it’s also worth noting that the study found that 99% of Twitter users are online news consumers.

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• Internet changes news consumption landscape (news.cnet.com)
• Pew report: We get our news everywhere (trueslant.com)

A Harris Research / AdWeek poll (via Marketing Charts) in the US puts some data onto a growing trend – the graying print newspaper market.

Among all Americans 43% still read a paper every day, a figure that is higher than I thought it would be.

However once you break it down into age groups a different picture emerges.   Among the over 55s, 2/3 still read their morning (or afternoon) paper.   For 35-44 year olds that’s down to just over a third (36%) while for 18-34 year olds it’s not even a quarter (23%).

I tried to find similar stats for the UK, and even two years ago according to a Parliamentary committee, 45% (so less than half) of the UK population read one of the national papers every day, with readership among 25-34 year olds falling by more compared to 18-24 year olds (40% to 37%).  Meanwhile the decline among the over 65s was only 3%.

In other words both the US and UK stats show that among seniors the daily paper is a habit.   The question obviously is, will it die out with them?

On the RAAK blog, Wessel van Rensburg has put the long term decline of the UK newspaper market into perspective.  In 1951, 48 million people lived in the UK while today there are 60+ million, an increase of 25%.   Yet, even while the population has increased, newspaper circulations have gone down by 30%.

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• How long can print newspapers last? (newsosaur.blogspot.com)
• Elderly Take Over! (stephenkinsella.net)
• Poll: Most won’t pay to read newspapers online (news.cnet.com)

It’s a simple truth that the vast majority of blog posts such as this one draw on existing news stories and then build on them in some fashion.    Hence the statistic from the Pew Research Center that 95% of stories with ‘new information’ originate from the traditional media, particularly newspapers.

Conducted in the Baltimore Maryland area, researchers found that 83% of stories were ‘repetitive’, with the other 17% that were new coming almost exclusively from what’s termed traditional media.   General interest newspapers were responsible for 48% of ‘new news’, specialist titles generated 13%, TV in the Baltimore area was responsible for 28% of new content, while new media only generated 4%.

It’s a fair point: Our society depends on organisations who have the resources and professionalism to delve into and uncover the stories we all need to know about.   Very few people who work in the digital media space would argue otherwise.   Instead in response to this research I’d say:

For non professional and online media outlets to break almost 1 in 20 news stories is quite high.   And there have been some major ones – for example, here and here

Even if social media doesn’t break news, it does have a role in moving it along and magnifying it considerably.   For example, look at what happened to Eurostar (the train service between London and Paris / Brussels) before Christmas

No one realistically thinks social media will ever replace traditional news gathering outlets, whether they publish in print or online.   But it is a game changer, and the organisations themselves seem to think so as evidenced by Sky News installing Tweetdeck across journalists’ computers.

Social engineering doomed to fail?
One thing that I do question is social engineering to ‘make’ people read newspapers.   True, giving 18 year olds free (print) subscriptions has had some impact in France, but I wonder how successful these sorts of schemes will be long-term.

Paid Content has an article about the (opposition) Labour culture spokesperson in Scotland, Pauline McNeill advocating a similar scheme North of the border.

The article also includes some stats about the mountain Scottish newspapers face, with ‘The Scotsman’, the paper that holds itself up as Scotland’s national quality paper, seeing a circulation drop from 75,402 to a pretty shocking 46,300 since 2002, and The Daily Record (the main tabloid), dropping from 626,646 to 323,01 in the same period.

Image – Swanksalot

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• Newspapers and Traditional Media Still Produce Most News (marketingpilgrim.com)

Bob Knorpp of the Beancast (which I’m on tonight) alerted me to this statement by Yates Buckley of Unit 9, made to coincide with last week’s Creativity and Technology event at London’s Saatchi Gallery:

“If you are a creative and don’t know about technology you’ll be out of a job soon.”

It’s a statement that I imagine touched a lot of raw nerves as it zeroes in on the debate raging in agencies today.  In fact, I’d point to another quote made by Guardian columnist Roy Greenslade the other month that nicely encapsulates it.   Greenslade talked about the fundamental divide between those who think the digital media revolution is transformative, or whether it’s tactical.

Substitute the word marketing in place of journalism here:

The split (in the pro and anti camps) is both philosophical and practical.

“There are those (with whom I agree) who believe that the digital media revolution is in the process of transforming journalism and those (such as Murdoch and most traditional newspaper publishers) who believe the net is merely another platform rather than an instrument of transformation.”

It’s a complex argument, but the truth as always surely lies somewhere in between.

I tell the 20-something execs at Cow that the skills set they’ll need in ten years time is different to the skills set they have now (and we have a responsibility to help them get there).   That’s due to consumers, and so agencies, straddling the old and new media divide, meaning that you still need to know about the old way of doing things while also embracing the new.

Beth Harte in fact expresses it perfectly in her post ‘PR 2.0 will double your workload‘.

Perhaps the voice of sanity in all this comes from Iain Tait of Poke, an agency that’s squarely at the forefront of digital marketing.   Iain talks about the dangers of getting carried away with technology for the sake of it:

“Now that we’ve been invited to the party and have money, influence and power, I worry we are like a bunch of kids with the keys to the sweetshop.   Do we need all that?  People like things that are free and simple – money likes stuff that is slick.   Building big things is fun and impresses people, but it has no value.”

Image – Sammy0716

Following Rupert Murdoch‘s comment that he might in future hide his news sites from Google, there’s obviously been a fair amount of discussion about it.  Ben Kunz’s take on the issue, including a look at how Sony manages to give away free content AND shift inventory is worth a read.

However, the obvious question is, could this become something of an own goal? Answers from Hitwise and Alexa say quite possibly yes.

Hitwise looked at Murdoch’s flagship US title, The Wall Street Journal, and found that both Google and Google News are the top traffic drivers.  More importantly, Google is responsible for driving new readers Murdoch’s way – with over 44% of Google traffic coming from people who haven’t visited the WSJ in the past 30 days.

That last point is important – with 88% of newspaper reading time happening in print (note – reading time, not actual readers), the way we consume online media is, outside a community of news nerds, such as myself, very different.

The other month, UK media blogger Malcolm Coles looked at the online editions of the UK national newspapers and found that over 6/10 readers only read a single page, or article, and leave again. The conclusion is that there is less brand loyalty online for news.  We search for what we look for, we consume it, and we quickly move onto doing something else.  And if we encounter a paywall, we can easily find that content for free somewhere else.

The Wall Street Journal at least does have a core of – paying – readers.  Looking at the UK tabloid, The Sun, Google is responsible for close to 20% of ‘upstream’ visits to the site according to Alexa. For The Times (see image below), that figure increases to over a quarter.

Given this much more single-minded way we now consume news, it will be interesting to see how Murdoch’s sites fare if he does pull them away from search. From the evidence, if he really goes ahead with it, he might have to do an about turn very quickly.

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