Winning Back Lost Readers Worldwide p. 19

By: David Astor

International Federation of Newspaper Publishers survey reveals
newspapers in many countries won back lost readers last year sp.

NEWSPAPER SALES IN many countries are on the rise after several years of losses, indicating that efforts to make newspapers more interesting and relevant to readers may be paying off, according to the 5th annual “World Press Trends” survey, conducted by the International Federation of Newspaper Publishers (FIEJ).
“Sales, and particularly penetration, are down almost everywhere if you take the past five years. Last year, however, a majority of countries won back lost readers,” said FIEJ director general Timothy Balding in releasing the findings at the 47th World Newspaper Congress May 29-June 1 in Vienna, which attracted 800 delegates and guests from a record 58 countries.
Major industrialized countries either reversed declines in newspaper sales or slowed them, Balding reported.
In the United States, sales decreased by 0.58% against declines of 0.86% in 1992 and 2.63% in 1991.
In Japan, sales rose last year by 0.49% against a drop of 1.17% in 1992, and in Australia, 1993 sales increased by 2% against a decline of 9.56% the previous year.
Belgium, Greece, Italy, Luxembourg, the Netherlands, Norway, Spain and Switzerland all saw daily newspaper circulation increases in 1993. Several of these had seen falling or stable circulation the previous year.
Meanwhile, daily circulation fell in Austria, Denmark, Finland, Germany, Ireland, Sweden and the United Kingdom.
In all, 75,548,000 newspaper copies were sold daily in Europe last year, down 0.03% from 1992.
Sales and readership appear to be on the rebound, but newspaper advertising figures remain disappointing in most of the 31 countries surveyed.
An exception is the United States, which was hit by recession before Europe and Japan and whose newspaper industry has begun to get back some of the advertising it lost in recent years.
U.S. newspapers saw a 4.14% growth in 1993 compared to a 0.95% growth the previous year, which Balding called “clearly encouraging.”
The U.S. newspaper advertising market remains by far the world’s largest, with $31.906 billion spent in 1993 ? more than twice the amount spent in Europe and three times the figure spent in Japan.
The picture was not so rosy elsewhere, as ad revenues in most of the countries surveyed decreased significantly last year.
The Western European nations worst hit were Italy, with an 11.01% decrease in revenues; Spain (10.28%); France (9.91%) and Sweden (9.04%).
Only two countries of the region saw increases in ad revenues: Greece, with an 18.37% increase, and Luxembourg, with 2.3%.
In all, $13.79 billion was spent on advertising in European newspapers last year, down 1.82% from 1992.
The Japanese newspaper market suffered significant advertising losses for the second consecutive year. Revenues in 1993 decreased by 10.08% over 1992.
The study indicated that newspapers’ loss of market share ? principally to television and direct mail ? continued worldwide with the exception of several Asian nations and some new democracies in Eastern and Central Europe. In just four of the countries surveyed ? Argentina, the Czech Republic, Singapore and South Korea ? did the newspaper business last year witness increased market share.
Charles Brumback, chairman and CEO of Tribune Co., Chicago, and chairman of the Newspaper Association of America told FIEJ attendees that because the media marketplace and customers’ needs have changed, his company’s mission also has changed.
“As populations become more diverse and as products become more specialized, advertisers need to reach these increasingly specific audiences with messages targeted demographically, geographically, sociographically,” he said.
Fragmentation has driven advertisers to explore alternative media to reach targeted groups and many newspapers have become targeted as well.
“But targeting is only one part of what is happening with our business,” Brumback said.
While ink on paper remains one of the most useful, reliable and economical formats for reporting daily news, he maintained, Tribune and other newspaper concerns have found tremendous success with such technologies as audiotex.
And these companies are working to provide information via on-line services, CD-ROM, video, telephone ? “or however the customer wants it,” Brumback said.
“That’s the key: providing our local, brand-named, quality information however the customer wants it, content edited with journalism’s heritage of leadership and the ability of reporters and editors to make sense of their work and to help make the worked work,” he added.
“No matter how the new information age shapes up, these core strengths of newspapers will remain. If we’re smart, we’ll simply bring our basic skills and our close relationships with advertisers to whatever new, digital delivery channels come down the road. And make no mistake, the digital age is what’s down the road for all of us.”
Brumback mentioned some of the groups and subsidiaries Tribune has established so the company will advance as technology advances, including a technology advisory committee composed of executives from all the company’s media businesses as well as individuals from outside the company with technical expertise.
He urged the publishers to educate senior managers about the importance of digital production and digital delivery of ad and editorial content.
Brumback also told the attendees they should demand uniform guidelines for Electronic Data Interchange, a system allowing advertisers, ad networks and ad agencies to send and receive transactions or messages electronically. He noted the NAA and INCA-FIEJ Research Association endorse universal guidelines.
Chris Oakley, group chief executive of the British company Midland Independent Newspapers Ltd., echoed Brumback’s sentiment that newspapers via newsprint is not an obsolete form ? and he told the publishers they should stop paying experts to tell them the printed word is dead.
“I’m sure that when Caxton made his first impression, there was already someone telling him, too, that the printed word was on the way out,” he said, referring to the English printer.
“The simple fact is that unless there is a bigger and more sudden shift in social behavior than the world has ever seen, the printed word will be around long after those experts prophesying doom in an all-electronic future have eaten their words.”
Oakley related that while the British media rarely are united, they concurred in 1991 that he and five partners had paid too much for three dailies ? including the Birmingham Post and Evening Mail ? along with a regional Sunday paper, one profitable weekly and a handful of money-losing weeklies and regional magazines.
Oakley addressed a FIEJ conference in Prague seven months after acquiring the papers and divulged plans to sweep away inefficiency, break through old union-imposed restrictions, cut costs and improve quality.
His remarks, he recalled, were greeted with considerable skepticism.
“My Prague presentation was perhaps seen as a farewell performance, whistling in the dark before being removed by the bankers,” he said.
How has Midland Newspapers fared amid this gloom and doom?
He said the group has expanded to include 20 free weeklies and two paid weeklies, and the company’s portfolio of magazine and specialty publication titles has more than quadrupled.
Oakley reported that profits in 1993 were about $24 million and profit margin was 21%. Currently, Midland is operating with a 25% profit margin.
Total advertising revenues for the entire press in the region increased by 2.3% last year. Midland’s ad revenues grew by 8.5%, excluding acquisitions.
Midland’s operating profit per employee increased from $6,000 in 1991 to about $16,500 in 1993, even though the company now employs about 100 more people.
” . . . Never underestimate the power of naivet?,” Oakley said. “It’s so much easier to confound the experts and win if you don’t know enough to realize that it’s impossible.”
Oakley complained that U.K. regional newspaper groups are becoming more centralized.
“Corporate directors, based at head offices, have proliferated while centers have been cutting budgets to cope with the recession,” he said. “And with corporate directors, of course, come corporate secretaries and corporate deputies with secretaries of their own.
“Then they have to justify their existence by inventing corporate policies, pronouncements upon editorial content, upon advertising rate increases, upon newspaper cover prices that are supposed to hold good from one end of the country to the other.
“What rubbish! All this may be fine if you are selling washing powder or Coca-Cola and marketing a single brand image worldwide. Local newspapers are about selling dozens of different brand images, matched to local demands . . . . We need diversity among our titles, not conformity.”
Oakley boasted that Midland has few group policies and almost no corporate staff, adding, “We are determined to keep our head office staff to a minimum.”
He pointed out the company’s four stated goals: maintain the flat management structure; eliminate all unnecessary costs; try harder to offer a complete publishing service, and pick team players who want to win.
“We shall avoid too much introspection and too much agonizing about whether the printed word will survive and concentrate instead on delivering growth for our shareholders and prosperity for our staff,” he said.

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