• by Jack Loechner , Staff Writer @mp_research, April 29, 2014

According to recently released preliminary data by the Newspaper Association of America, circulation revenue for U.S. newspapers recorded a second consecutive year of growth, rising 3.7% to $10.87 billion in 2013. Overall, total revenue for the multiplatform U.S. newspaper media business amounted to $37.59 billion in 2013, a slight decline from $38.60 billion in the previous year.

Proceeds grew in digital advertising, direct marketing, and newly developing sources, while income from traditional print advertising channels declined. This trend, says the report, reflects an industry evolving its business model by taking advantage of developments in technology, consumer behavior, and advertiser interest, to grow audience and diversify its revenue stream.

“Newly-developing and other sources,” those outside of advertising and circulation, generated about 8% share of revenues, growing 5% year-over-year to $3.15 billion. The new sources include digital agency and marketing services (up 43%), event marketing (+5%), e-commerce (-4%), commercial printing (+4%), distribution of other products to consumers (-2%) and income from royalties, licensing, rental, waste and scrap sales (+3%).

Key findings from the study include:

• Total revenue for 2013 was $37.59 billion, a decrease of 2.6% from the prior year. Within that total, $23.57 billion came from advertising across all platforms, $10.87 billion from circulation and $3.15 billion from newly-developing and other sources
• Revenue from digital channels (advertising, circulation, digital marketing services, and other) rose 5.8%, and accounted for 12% of total industry revenue
• The group of newly-developing and other revenue increased 5% overall.  The component of digital agency and marketing services, where newspaper media companies tap into interest among local businesses in the digital environment, increased 43%
• Digital advertising rose to $3.42 billion and accounted for 19% of advertising revenue; pure-play (digital only) advertising rose 14%. Mobile advertising revenue, though a small portion of overall total revenue (less than 1%), jumped 77%
• The $23.79 billion in advertising represents 63% of total revenue in 2013, declining 6.5% from $25.2 billion in 2012. Traditional print advertising was reduced to $17.3 billion, and makes up less than half of total revenue
• Advertising in the traditional printed daily and Sunday newspaper decreased 8.6% in 2013 from the previous year. Retail advertising dropped 8%, with national advertising also declining by 8%. Classified advertising was off 10.5%
• An estimated 24% of the $3.42 billion in digital advertising is “pure-play” digital advertising. This is advertising that appears only on newspaper digital platforms, not in the print products
• Within the circulation revenue total of $10.87 billion, digital-only circulation revenue grew 47%, and print and digital bundled circulation increased 108%. With some companies shifting to all-access packages, print-only circulation revenue from home delivery and single-copy sales dropped 20%

Revenue outside of advertising and circulation, from newly-developing and other sources, accounted for just over 8% of total newspaper media revenue, says the report. Digital agency and marketing services, which some newspapers established in 2012 and others launched in 2013, jumped 43%.  Event marketing dollars rose 5% while e-commerce earnings slipped 4%. Dollars gained from commercial printing increased 4%, while revenue from distribution of other products to consumers dipped 2%.  Other revenue activities such as income from royalties, licensing, rental,waste and scrap sales, climbed 3%.

N.B. NAA projections are based on a broad sample that includes public and private company data collected on a confidential basis. The data are normalized for a 52-week reporting period in both years

For additional information about the NAA projections, please visit here.