The Newpaper Industry Market Assessment
- ID: 3887
- January 2001
- Region: United Kingdom
- Key Note Ltd
The newspaper market has had to change considerably in recent years as competition from other news sources - including the Internet, and cable and satellite television - has put pressure on circulations. The focus has been shifted in order to incorporate increased coverage of lifestyle issues, with many newspapers adding new sections and stand-alone supplements. Saturday editions have been a particular focus of attention, and there has also been an increase in sports coverage.
Despite these changes, revenues from copy sales have remained relatively stagnant - a trend exacerbated by the fact that price wars over the past decade have, until recently, prevented increases in cover prices. However, in 2001, a number of newspapers have introduced cover-price increases, and ever-growing newsprint costs may force others to follow suit.
Until recently, advertising revenues had been growing at a healthy rate. However, the newspaper industry, like other media sectors, has been severely affected during the past year by an overall fall in advertising expenditure. A number of national newspaper groups have reported falling advertising revenues during the same period, and have reacted with cost-cutting measures including job losses and adjustments to online activities. On the whole, the national newspaper sector has been more severely affected than local and regional newspaper groups.
The national newspaper market is in the hands of a relatively small number of players. Cross-media ownership is much in evidence, with some newspaper groups being ultimately owned by large multinational media companies, and many specialist newspaper groups diversifying into other media, such as radio. However, the past year has been characterised by an overall reduction in online activity among newspapers.
The most significant change of ownership in the past year within the national sector has been the purchase of Express Group Newspapers by Northern and Shell, publishers of celebrity magazine OK! and a number of 'top-shelf' titles.
The regional newspaper market has been subject to much consolidation during the past decade, a process which is still continuing. The need to make economies of scale has also led to title-swapping between companies - clustering titles within the same geographical area - which some commentators feel will be even more important in the future.
Among recent acquisitions within the sector have been the purchase of Southnews by Trinity Mirror, and Newscom by Newsquest's owner Gannett. Regional Independent Media (RIM), one of the few remaining independent publishers in the top ten, is currently up for sale.
The original NOP research commissioned for this report indicates that there is a strong degree of loyalty among newspaper readers. A high proportion of respondents remain loyal to the same newspaper that they were reading a year ago, and very few say that they would consider switching because of a small increase in cover price. Perhaps more surprisingly, even fewer
say that they check out other newspapers for special offers and promotions before deciding which one to buy.
Nearly three in ten respondents are regular newspaper purchasers, either buying or having a newspaper delivered every day of the week. Among less frequent purchasers, weekend newspapers have more appeal than week day ones.
On the question of the proliferation of supplements and sections in newspapers, there is a narrow majority in favour of having fewer rather than more supplements.
There is little enthusiasm for advertisements in newspapers, and a high degree of scepticism, with less than one in ten believing that `the newspaper I read would not allow products to be advertised in it if they were no good.'
The effects of the existing global turndown in advertising expenditure will undoubtedly make themselves felt in the newspaper market over the next few years. Little or no growth is expected. The September 2001 terrorist attacks in the US, whose full consequences are as yet unknown, will also undoubtedly have a negative effect on advertising revenues in the short term.
The cyclical nature of economic trends means, however, that a recovery will take place eventually. Recent consolidation and cost-cutting activities within the newspaper sector indicate that it will be in a strong position when this does happen. SHOW LESS READ MORE >