Newspapers’ digital products to
play significant role in revenue generation
T
he greater penetration of internet and broadband access will be happening where as more display and classified revenues fall will occur. But revenues from newspapers’ digital products will help combat the erosion of traditional newspaper revenues.
It has been revealed in the Print Industries Market Information and Research Organization (PRIMIR) study conducted in late 2008 for examining the forces shaping the North American newspaper industry, including changing marketing strategies and the emergence of digital media—from wireless devices to e-readers to social networks—that are affecting newspaper advertising revenues. One publisher expressed that within three years, fifty percent of their revenue would be from digital. And, that’s not exclusively online offerings.
The report, published recently under the title ‘The Future of the North American Newspaper Industry’, predicts that by 2020, circulation for daily newspapers will have eroded by 26 percent, and Sunday circulations will have declined by about forty percent. Companies servicing the newspaper business can expect an industry likely to be a third smaller in revenue and about half the size it currently is, in terms of volume of materials consumed.
Newspapers themselves will look slightly different from those of today as well. Readers most likely will be buying newspapers that are smaller in size and have fewer pages. The quality of printing, not to mention the paper, may be more upscale than current iterations, however. Meanwhile, coverage may lean more toward local news than ever before. One publisher predicted that premium journalists would be ‘fighting like crazy’ to snare the big stories, ‘but people will be interested in the small, local and relevant features’. The industry is already expressing interest in more niche and versioned editions to truly serve the local markets. And, that spells continued opportunity for printing—and digital printing.
Despite all these changes, the study concludes that great opportunities do exist for some suppliers to the newspaper industry. It is expected that many newspapers will outsource non-core competencies, including printing and IT, which may provide opportunities for suppliers to step in and delve more into the service industry. As newspaper publishers spin off their printing operations, the printers picking up that business may need to upgrade their equipment to meet publishers’ increased quality expectations. Consumables vendors, on their part, may be able to encourage publishers to adopt higher standards on paper and inks to ensure quality publications. Because of the potential for versioning in the future, plate suppliers may actually see an increase in plate consumption by the newspaper industry over the next twelve years. While it isn’t and won’t be ‘business as usual’ in the newspaper industry, opportunities do await firms in the industry supply chain who are willing to think ‘outside of the box’ and progressively.
