Revenue from newspaper circulation has surpassed revenue from advertising.

A major shift in the newspaper business model is finally here after years of gestation.

According to the annual World Press Trends survey released by the World Association of Newspapers and News Publishers (WAN-IFRA) on June 1, for the first time this century, revenue from newspaper circulation worldwide has surpassed revenue from newspaper advertising.

“The fundamental assumption of the newspaper business model – the long-standing supplementary revenue that advertisers have provided for news content – ​​is no longer valid,” said Larry Kilman, Secretary General of WAN-IFRA, who presented the survey results at the 67th World Newspaper Congress, the 22nd World Editors’ Forum and the 25th World Advertising Forum in Washington, DC. “We can confidently say that readers have become the largest source of revenue for publishers.”

Newspaper publishing and advertising revenues reached $179 billion in 2014 – more than book publishing, music or film revenues. $92 billion of this came from print and digital newspapers, while $87 billion came from advertising.

“This is a seismic shift from a business-to-business, or publisher-to-advertiser, model to a business-to-consumer, or publisher-to-reader, model,” said Kilman.

In the 20th century, advertising generated up to 80% of revenues in some markets. This ratio varied from market to market, with advertising accounting for as much as 40% of revenues in European and Asian markets.

However, the survey found that newspaper advertising revenue is falling everywhere, while circulation revenue is relatively stable.

“Print was once one of several traditional marketing channels, and often the most popular choice for brands, and the logical choice for marketers. This direct dependency no longer exists. Advertisers today have more than 60 media channels to choose from. But in 2015, the story of the newspaper industry was not about death, decline or revenue decline. Newspapers around the world were successful in proving their value to advertisers in an increasingly competitive environment. Newspapers found new markets and new business models for news products such as advertising and circulation. Print businesses became truly multi-platform news and media businesses,” said Kilman.

Although newspapers are now ubiquitous across all media platforms, their reach and influence remained stagnant in the 20th century, largely relying on print circulation and a variety of fragmented and substandard coverage methods on the Internet. The challenge for the newspaper industry is to measure the reach of news content across all platforms using new statistical methods.

The World Press Trends survey includes data from more than 70 countries, representing more than 90% of global publishing value. The data is compiled from the vast work of a wide range of national newspapers and media organizations, as well as from global sources such as Zenith Optimedia, IPSOS, ComScore, RAM and ITU.

The survey, presented annually at global journalism conferences around the world, found:

The Future is Mobile

8 out of 10 smartphone users check their phones within the first 15 minutes of waking up. There is a war going on for readers' attention, and mobile devices are winning.

- According to the InMobi mobile media consumption report, globally, customers spend an average of nearly 2.2 hours per day using mobile phones (97 minutes) and tablets (37 minutes), accounting for 37% of media consumption time, far surpassing TV (81 minutes), desktop computers (70 minutes), radio (44 minutes) and print newspapers (33 minutes).

- About half of mobile interactions are using apps, with 30% of media channels' monthly audiences being mobile users.

- For the first time, desktop users are down. In the US, UK and Italy, time spent on smartphones is surpassing time spent surfing the web on computers. According to Pew Research, for 19 of the top 25 news sites in the US, mobile traffic exceeded desktop traffic by at least 10%. People who used only mobile devices to view digital news content increased 53% in March 2015 compared to the same month last year, according to a report by the Newspaper Association of America.

“When it comes to new revenue streams, we’ve been talking about the mobile era for the last 10 years. It’s finally happening. In 2014, desktop internet usage declined globally in favor of mobile devices. And mobile app usage is now the dominant digital media activity in the U.S.,” Kilman said.

Newspaper circulation increases in the East, decreases in the West

The number of people paying to read e-newspapers is increasing.

- Around 2.7 billion people worldwide read print newspapers and more than 770 million read them online. However, there is growing evidence that print and online newspapers are both driving the growth of global newspaper readership. Figures from Australia, for example, show that nearly 86% of adults get their news on some platform. In the UK, the figure is 83%, and in Chile, nearly 82%.

- Print newspaper circulation grew +6.4% globally in 2014 compared to the previous year and has grown by +16.5% over five years. This was largely due to increased print circulation in India and elsewhere in Asia; the Indian newspaper business remains the world’s most stable print newspaper industry. The latest figures from India have had a significant impact on the global picture, in part due to the continued growth in circulation there.

- Circulation increased +9.8% in Asia in 2014 compared to the previous year, +1.2% in the Middle East and Africa, and +0.6% in Latin America. In North America, circulation decreased -1.3%, in Europe -4.5%, and in Australia and Oceania -5.3%. Over the five years, newspaper circulation increased +32.7% in Asia, +3.7% in the Middle East and Africa, and about +3% in Latin America; it decreased -8.8% in North America, -21.3% in Europe, and -22.3% in Australia and Oceania.

- In mature markets, newspapers are adopting new strategies to earn more revenue from fewer subscribers. These include raising cover prices and reducing production costs through reduced print runs. However, these measures risk alienating some segments of the readership.

- Pay-per-click digital news subscriptions increased by 56% in 2014 and by more than 1,420% over the past five years. In a Reuters Institute for Digital News survey of 10 countries, one in 10 people paid for digital news. In Brazil, the figure was 22% and in the UK, 7%.

Print newspapers still have revenue

- Globally, more than 93% of newspaper revenue comes from print, and print will continue to be the main source of revenue for many years to come. At the same time, the newspaper industry around the world is putting a lot of effort and increasing creativity to transform its business model from two-way to multi-way.

- Although digital advertising accounts for a small portion of total newspaper revenue, it continues to grow at a significant pace, up 8% in 2014 and 59% over five years, according to PricewaterhouseCoopers. Social media and technology companies continue to be the driving forces behind digital advertising. Google has the largest market share, with 38% ($19.3 billion) of digital advertising revenue. Facebook had a market share of nearly 10% in 2014, and is the company with the largest revenue from digital and mobile advertising.

TV advertising still reigns supreme, but internet and mobile are gaining ground

- Television advertising continues to have the largest market share globally, with nearly 40%, followed by computer and mobile internet advertising with over 24%, newspapers 15%, magazines 7.3%, outdoor and radio advertising 7.3%, and cinema advertising 0.5%.

- Global print advertising fell -5.17% in 2014 compared to the previous year and is down -17.51% over 5 years. Since its inception in the mid-90s, internet advertising (both desktop and mobile) has been on the rise.

- Print advertising increased +4.86% in Latin America in 2014 compared to the previous year, increased +2.21% in the Middle East and North Africa, but decreased in other regions: -6.54% in Asia Pacific; -7.5% in North America and -5.01% in Europe. Over the five years, print advertising increased +27.68% in Latin America; decreased -28.22% in North America, -22.11% in the Middle East and Africa, and -7.34% in Asia Pacific.

- Internet advertising spend surpassed total newspaper and magazine spending in 2014. Over the past 10 years, internet advertising has grown from 4% of global spending to 24%. Over the same period, newspapers' share of global spending has halved, from 30% to 15%, while magazines' share has fallen from 13% to 7.3%.

- Revenue from online newspaper advertising will not replace the large revenue from print newspapers, but will still increase significantly. Online newspaper advertising increased +8.5% in 2014 and increased nearly 60% in the past 5 years./.

WAN-IFRA, the world organization of newspapers and news publishers, is a leading provider of industry research and analysis that identifies and publicizes key breakthroughs and opportunities that benefit news media worldwide.

The World Press Trends report, the leading source of press data and global trends, has been published by WAN-IFRA since 1989.

The data are presented in an annual report to all WAN-IRA members, and can also be accessed free of charge in an interactive database.

For non-members, WAN-IRA offers the database through individual access on an annual subscription basis and IP access allowing companies, universities and libraries to bring information to a wider audience.

See details athttp://www.wan-ifra.org/wpt

According to VNA