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Ads no longer subsidise news

News, 02 June 2015

WASHINGTON, DC: Global newspaper circulation revenues are larger than newspaper advertising revenues for the first time this century, according to the annual World Press Trends survey.

"The basic assumption of the news business model – the subsidy that advertisers have long provided to news content – is gone," stated Larry Kilman, Secretary General of WAN-IFRA, the global organisation for newspapers and news publishers.

"We can freely say that audiences have become publishers' biggest source of revenue," he added.

The survey, compiled by dozens of national newspaper and news media associations with support from global data suppliers covers more than 70 countries and accounts for more than 90% of the global industry's value.

It showed that newspapers generated an estimated US$179bn in circulation and advertising revenue in 2014 – larger than the book publishing, music or film industries. Of this total $92bn came from print and digital circulation, while $87bn came from advertising.

Kilman described this as a "seismic shift" as the emphasis of publishers shifted away from business and advertising towards consumers and audiences; for much of the past 100 years, advertising has accounted for up to 80% of revenues in some markets.

But the survey also revealed that while newspaper advertising revenues are falling nearly everywhere, circulation revenues are relatively stable.

"Newspapers around the world are successfully proving their value to advertisers despite booming competition," Kilman asserted. "They are discovering new markets and new business models that are today as pertinent to news production as advertising and circulation revenues. From print newspaper businesses, they have transformed into true multiplatform news media businesses."

That said, globally, more than 93% of all newspaper revenues still come from print, with digital advertising a small but growing contributor: up 8.5% in 2014 and nearly 60% over five years.

There are distinct regional differences, with print newspaper advertising increasing in Latin America (+4.86% in 2014) and the Middle East and North Africa (+2.21%), but falling in Asia and the Pacific (-6.54%), North America (-7.5%) and Europe (-5.01%).

This largely reflected circulation figures which were up in Latin America (+0.6%) and the Middle East and Africa (+1.2%), down in North America (-1.3%) and Europe (-4.5%).

Asia was an exception, as circulation there rose 9.8%, largely because of healthy figures from India, boosted by an election year and a growing number of publications.

Data sourced from WAN-IFRA; additional content by Warc staff