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Panpa Bulletin : March 2006
22 | PaNPa bUlletiN March 2006 Newspapers are the best medium in the world: for readers, for advertisers and for investors. "Media markets are fast-chang- ing and evolving, and newspapers -- long predicted to be in terminal decline by many advocates of TV and new media -- will in fact con- tinue to play a more vital and vi- brant role in the media landscape of the future. "All is not well in the world of newspapers -- or so we are being told by the so-called media ex- perts. They tell us that our circu- lations are not growing, and that's because the young aren't reading; and the reason they are not read- ing is because they -- and everyone else -- is time starved and too busy; AND even if we can get them to read, these consumers apparently are increasingly reluctant to pay for that privilege, expecting it for free; and so on and so forth... "However, I intend to give you a reality check, providing you with an insight into what is really hap- pening in our industry and in the broader media matrix -- and dis- pelling the rather tired, conven- tional wisdom that our industry is a 'deadwood industry'. "So let's look at some basic facts about newspapers: 1. Over one billion people read a newspaper every day 2. Newspaper circulations worldwide continue to grow 3. Newspaper advertising con- tinues to grow -- and remains more effective than TV 4. Of the established media, newspapers are far better at man- aging the economic cycle than their competitors 5. Newspapers represent the only true mass media market channel -- being fragmentation- proof 6. Newspapers are competing far more effectively against the onslaught of digital media than broadcast 7. Broadband penetration is not adversely impacting underly- ing volumes or advertising 8. In the last 24 months, more new, innovative newspaper prod- ucts have been launched than over the prior 30 years 9. The new 'free' dailies have - in a short time - captured over 25 million readers, particularly among the young 10.Newspaper companies continue to invest heavily in their business. circulation "Newspaper circulation grew worldwide in 2004 by two per- cent, taking global sales to a new high of 395 million copies. Over the past five years, volume growth was 4.8 percent, obviously skewed by stronger growth in developing economies. advertising "Now, let's follow the money and see just how advertisers look at newspapers. Zenith Optimedia forecast that the global advertising market -- defined as client spend in traditional media -- will top $370 billion in 2006. And where do newspapers sit? Well, if we look at 2006, an estimated $100 bil- lion will be spent in newspapers, second only to television at $130 billion. Despite the growing com- petition, newspaper spend was up 5 per cent in 2005. Spend in newspapers worldwide exceeds the combined spend of radio, outdoor, cinema, magazines and the internet "If you accept that the key to media exposure (and thus ad- vertising effectiveness) is the time that people spend reading, watching, using or listening to the medium, let me ask you - for every hour that the American na- tion spend in front of their televi- sion, how much do you think that advertisers invest trying to reach them? How much are they willing to invest in reaching their audi- ence? • Every hour of TV viewing attracts advertisers to spend 40.1 million • For each hour of radio listener- ship, its only $19.3 million • And for the Internet - for all those hours people are now glued in front of their screens, advertis- ers spend $65.4 million per hour, over 50 percent more than TV • And for newspapers -- which people always think less -- well, actually advertisers spend $316.3 million for every hour of newspa- per reading economic stability "But as we know, advertising has a cyclical quality to it, and it is a fact that newspapers have consistently been able to man- age the vagaries of the economic cycle better than other competi- tive media. Newspapers have a relatively high variable costs mix, they are particularly robust in coping with the economic cycle, have a better and more diversified revenue mix, a broader spread of advertising categories, have the capacity to achieve better realiza- tion per copy and debt levels are at historic lows. Dangers of fragmentation "As fragmentation takes a ma- jor (and growing) bite out of TV, Internet, and radio audiences, newspapers remain the only true mass media market channel -- a key demand for advertisers, who want an estimable, steady and re- liable demographic. Just consider these facts from the UK, which can be mimicked in any major Western market (and increasingly in developing markets). • In 1994, ITV enjoyed a share of TV audience of 39.5 percent. To- day that figure is 23.6 percent • In 1994 the UK's 'News at 10' en- joyed an audience of 6.6 million. Today it is 3.3 million • In 1994, 'Coronation St' enjoyed an audience of 19 million. In 2004, it enjoyed an audience of 15 mil- Newspapers a reality check In a world constantly talking of the demise of newspapers, president of the World association of newspapers gavin O’Reilly believes newspapers are the mass-marketing medium of the future. he spoke of his views during a speech in london in January “among 13-24’s, free dailies have attracted far more new readers. What is better news for paid-for publishers is that, for those people who are ten years older, the picture is actually reversed.