Grey future for the newspaper industry

Printed newspapers are coming under attack. Printed circulation and readership are declining as readers migrate to alternative sources of news, and this is also lowering the effectiveness of print advertising.

Advertising is also migrating from printed newspapers to the internet and other media. The shift of newspaper readers to online news is a challenge for newspaper operators as they face new competitors, and online revenue and profits are low compared with print revenue and profit. Newspaper operators are fighting back by cutting costs in their legacy print operations, sharing resources across print and online editorial, offering more attractive content and advertising propositions, and charging more for online content and advertising.

The newspaper printing or publishing industry is forecast to generate revenue of about $6.54 billion in 2012-13, down 4.0% compared with 2011-12. The industry is domestically oriented, with insignificant levels of imports and exports. However, subscription and free access to overseas titles can represent a competitive threat to the readership of some Australian titles, particularly those offering international, news and business coverage.

Industry revenue is expected to decrease at an average rate of 6.1% per annum in the five years through 2012-13. Printed newspapers will suffer a decline in their share of economy-wide advertising spending, although this decline will be partly offset by newspapers’ growing online advertising revenue. Newspapers’ print circulation revenue will be adversely affected by a decline in circulation volumes, but the effect of this on revenue will be partly offset by an increase in circulation prices.

Industry at a Glance

Industry revenue is forecast to decrease at an average rate of 4.5% per annum over the next five years, with revenue of $5.2 billion in 2017-18. The industry will benefit from a growing Australian economy, which will tend to promote advertising spending. However, there will be intense competition both from within the industry and from other media. Print circulation and print advertising revenue will decline; however, this will be partly offset by higher online revenue.