Friday, 9 March 2012
UK newspaper circulation down 20% in five years - with regional press losing nearly 30% of sales
British newspaper circulations are among the worst performers in Europe, according to industry analyst and consultant Jim Chisholm.
They have plunged by 20% over the last five years, compared with a European average of 12%. During the past five years UK nationals declined by 16% against a European norm of 13%, while regionals declined by 29% against a norm of 12%.
Only Denmark with a decline of 21%, caused by a failed free newspaper war, has fared worse.
Chisholm gives the gloomy figures in an article for the fothcoming book What Do We Mean By Local?, edited by John Mair, Neil Fowler and Ian Reeves, which is to be published by Arima on March 27th.
He writes that there are more than one thousand regional non-daily titles, against one hundred and four dailies delivering 20m copies per issue, against 3m per issue for the dailies. Of all newspaper advertising in the UK, 42% is in national press, 21% in regional dailies, and 37% in regional weeklies.
Chisholm says that "on the digital front, international comparisons are harder, given that we operate within the English-speaking world, which has advantages and disadvantages.
"But here again, with notable exceptions, the picture is not encouraging. British newspapers share a global challenge in that they may attract high numbers of unique visitors, but those visitors return only occasionally, and view very few pages. There is little research as to why this is, but without increased intensity, it is hard to see how either access or advertising revenues are going to grow."
In the UK only 18% of the total population read a local daily newspaper compared with 53% in Germany, 21% in France and nearly 70% in Norway and Switzerland.
Chisholm says: "While the British still connect with their newspapers – according to the Newspaper Society over 70% of the population read their local newspaper – regular readership is low. Only 18% of the population read a regional daily on an average day. Weekly newspapers are relatively more popular, but even here readership is low compared with other markets, and three quarters of non-daily distribution is free newspapers.
"Of course people are increasingly turning to digital media, and this together with newspapers’ ability to target highly focused pockets of communication through leafleting, means that newspapers remain a highly influential medium for society, advertisers and so many other stakeholders, in reach if not in frequency – a continuing theme.
"Our challenge is not readership, but reading frequency and intensity, and digital consumption is an exaggerated version of what has happened in print. As I’ve written widely, and been widely ridiculed for saying, newspapers are not losing circulation because of the Internet; sales were declining long before the Internet came along."
On marketing, Chisholm points out: "Coke spends 17% of turnover on marketing their sugary liquid. Unilever spends 16% on promoting their ubiquitous products. Newspapers spend virtually nothing on above the line or point of sale promotion."
On digital, Chisholm claims: "While the UK can boast the world’s highest proportion of advertising expenditure now spent in digital media (31.2%), newspapers continue to attract only around 6% to 8% of total revenues from these new sources.
"Take these relatively low revenues per copy together with the UK’s shareholders’ voracious appetites for profits and it is not difficult to see why British newspapers are suffering more than their peers in other markets."
He adds a note of optimism: "Digital media options are improving, with the advent of smartphones and tablets. Initial feedback regarding newspaper readership on tablets is that news consumers on tablets are every bit as intense and regular as those in print."
Chisholm claims: "As digital consumption shifts from fixed Internet to mobile and tablet – and this rate is only going to accelerate, so the opportunity for charging, and importantly increasing consumption intensity will increase.
"It will either be owned by a new entrant or by a partnership of all major UK regional publishers."
Chisholm highlights the key strategic messages as:
• The combination of low revenues per copy and high profit expectations relative to other countries, are the factors that got us to where we are and will dictate our future unless we rethink;
• Our brands have been emasculated through a cancellation of intelligent marketing;
• News is under-represented at a local level. Among major markets our lack of local readership is extremely unusual;
• In the digital world newspapers can have a major impact but there needs to be more scientific attention paid to audience behaviour in terms of loyalty, frequency and intensity.
Among the solutions looked at by Chisholm is the growing switch by daily regional newspapers to weekly publication which he says "a comparison with other markets, and an examination of changing audience and advertiser behaviour suggests that a move could be a very positive strategy."
He says publishers should also look at hyper-local opportunities in collaboration with others; revisit their multi-media offerings; return ownership to its roots "by offering their local media properties back to local business people with a loyalty and empathy with the markets they know, at a realistic market price."
Chisholm concludes: "From within the UK regional newspaper industry things look particularly challenging. Comparison with countries provides a small consolation in that others are experiencing similar structural and economic challenges.
"But further comparison also shows that the UK newspaper industry is unusual in its structure, and also that is a very lean industry still managing to suck good profits out of unusually low revenues."