Written by Nidhi Saligram, Junior Marketing Consultant at WBC UK
It is no secret that the global newspaper industry has had a couple of difficult decades. People are spending less time on print media as digital and online media is easily accessible in real-time. It has been quite challenging for the industry to adapt to new digital ways of reporting news. News publications have diversified their businesses and moved online, in an effort to combat the continuous fall in printed newspaper sales and subsequent loss in revenue. However, COVID-19 came as a new challenge for the industry.
Figure 1: Daily Newspapers
The COVID -19 outbreak was first reported in December 2019. Within a couple of months, the unknown virus had become a global crisis impacting the entire world, socially and economically. In March 2020, the World Health Organization (WHO) declared the COVID-19 outbreak a pandemic and the world changed drastically. The absence of short-term medical response to the virus resulted in lockdowns and social distancing restrictions, to prevent the virus’s transmission. Within a week, most parts of the world had closed their borders, and national lockdowns were declared—the world was in a Great Lockdown. The magnitude and pace of collapse in the following activities are unlike anything experienced in our lifetimes.
1: The downfall in the circulation of the newspaper
The newspaper industry works to inform people about current events happening all around the world. Their revenue stream comes from the circulation of newspapers and advertisements published in the newspapers. With the Great Lockdown being imposed worldwide, it significantly impacted the print publications, as they were highly dependent on printers being able to print, distributors being able to drive the copies to the customers and stores and stalls being open for people to buy or pick up the newspapers. The national lockdowns impacted every part of the print publication supply chain.
During the initial days of lockdown, people worldwide started to avoid buying the newspaper to reduce the risk of getting infected by COVID-19. The circulation of newspapers drastically decreased, and people began to shift to reading newspapers online. According to the PWC Media Outlook report, the newspaper industry’s total revenue was approximately $107.96 bn in 2019, and in 2020 the income was $93.38bn resulting in a loss of $14.58bn. The income generated through the circulation of the newspaper in 2019 was $58.71bn, and in 2020 it was approximately $52.14bn.
2: Marketing budgets are down worldwide
All the product sectors across the globe have seen a massive decline in 2020. WARC has predicted that by this summer, the travel and tourism industry will have a decrease of 31.2 %, leisure and entertainment will experience a decrease of 28.7%, the financial sector will see a decline of 18.2% and the retail sector will have a decrease of 15.2% (WARC, 2020 ). With massive downfall in all industries worldwide, the marketing and advertising budgets have been at an all-time low.
Figure 2: Global marketing index 2020
Even though in the last few years the global newspaper industry has been moving away from the traditional printed newspaper to the digital newspaper on mobile and laptops, the newspaper is still an attractive platform for image advertisers and premium segment readers globally. According to the PWC Media Outlook report, the revenue from the advertisements in 2019 was $49.245bn, and in 2020 it reduced to $41.241bn. By 2024 there is expected to be a downfall of 6.11 %.
Despite the digital newspaper transformation, print revenue accounts for approximately 80 % of the global market revenue. Print publication embraces the new creativity and experimentation and new initiatives to report the news in the market. It has become imperative for a newspaper publisher to play a long-standing role in writing high-quality information in the current situation. It is also observed that the trust in journalists and quality journalism is rising particularly on online forms. However, looking at the present scenario of a massive increase in social media consumption, advertisers place their advertisements on social media platforms rather than digital newspapers, limiting the market’s growth.
3: COVID-19 has changed our media habits
The pandemic has drastically increased media consumption and has grown worldwide. The research data show that everyone worldwide is spending more time on social media and messaging services. Gaming and streaming services had seen a significant pandemic bump.
Social media consumption has increased by 21% compared to before. The news consumption has increased by 36%, and audiobook and book reading has increased by 14% than before (Statista, 2020). The research has also shown that one in five homes in the UK have signed up for a new video streaming subscription during the Great Lockdown (Statista, 2020). Given the current situation, publications need to find new innovative and creative ways to get attention and build relationships with the readers.
However, to everyone’s surprise, research shows that five weeks into the lockdown, the digital existence started to lose its charm with media consumption falling considerably after enjoying the initial surge at the beginning of the pandemic. Hence, the news publications are looking to adapt to the digital newspaper’s subscription models to sustain and fund their operations.
Figure 3: COVID-19 Barometer
The speculation is that the sensory deprivations of increasingly digital lifestyle will find a new future counterbalance in uber analogue to come.
4: Publishers are producing new products
With the media consumption drastically increase in 2020, many publishers have an experiment, creative and innovative ways of dropping new products like coronavirus podcasts, alerts, and newsletters. According to research conducted by WAN-IFRA’s Global Media Trends Panel, more than half of publications have launched new products due to the pandemic.
Figure 4: New media products launched as a result of COVID-19
With so many new creative and innovative ways to consume the daily news, there has been a decrease in the number of people reading the newspaper.
The coronavirus is not going away any time soon, so newspaper publications need to recognise the new norm and adapt to it. With technology and the world evolving every day, every crisis comes with a unique opportunity, which has undoubtedly been the case with the newspaper industry. It is time for them to be innovative, creative and look beyond.
This article is part of an exchange series of articles started in collaboration between ConQuest Consulting and its British partner WBC UK. It has been written and produced by WBC UK.