Commentary

Revenue Outlook Dramatizes Need For Innovation In Publishing

This week brought more grim predictions for publishers with two forecasts indicating the recovery from the coronavirus pandemic won't be shared equally among media channels. The estimates only underscore what publishers already know about diversifying their revenue and adapting to changing media consumption habits.

Print advertising in the U.S. is forecast to recover somewhat next year, though it will still decline by 6.5% from 2020, according to an estimate by IPG Mediabrands' Magna unit cited by Media Daily News. That decrease is less severe than this year's estimated decline of 27%, though still worse than the 23% decline for radio and 16% drop for linear TV.

Magna predicts digital advertising, which makes up more than half of the total U.S. ad market, will expand by 4.2% this year and 7.4% next year. Those gains bode well for publishers that expand their digital presence.

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However, a separate forecast from consulting firm PwC offers a more dire outlook for the embattled newspaper industry. It predicts that print and online advertising revenue in the U.S. will slide from $15 billion last year to $10.9 billion by 2024, an annualized decline of 6%, as reported by the Press Gazette.

Total circulation revenue in the U.S. will decline from $11.4 billion in 2019 to about $10 billion in 2024, a more moderate decline of about 2.6% a year. However, during that five-year period, digital subscription sales will grow by about 9% a year from $4.5 billion to $7 billion, PwC forecast, as publishers harden their online paywalls to generate greater reader revenue.

The forecast isn't a major surprise for news publishers like The New York Times, which has ambitious goals to boost print and digital circulationto 10 million by 2025, from about 6.5 million currently. About 5.7 million of its subscriptions are now digital-only.

News publishers are likely to pool their resources to boost subscriptions, as The Washington Post and Financial Timesare now doing with an offer for a digital bundle. The promotional efforts are more feasible on digital platforms than in print, and can help publishers reach new audiences.

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