Press Release Summary = 27.8% of total media advertising expenditure in the year ending December 2004 was spent on newspaper advertising and, even though much is made of the fact that online advertising is taking an increasing share, online advertising represented just 3.6% of the total expenditure in the same period
Press Release Body = The Newspaper Industry: Market Assessment 2005
27.8% of total media advertising expenditure in the year ending December 2004 was spent on newspaper advertising and, even though much is made of the fact that online advertising is taking an increasing share, online advertising represented just 3.6% of the total expenditure in the same period.
Total advertising expenditure in the year ending December 2004 rose across the board, by 5.6%, with newspapers themselves enjoying increases in revenue of 3.7% (national newspapers) and 5.7% (regional newspapers) over the previous year. Forecasts for 2005 also see increases in revenues from both advertising and copy sales - despite falling circulations across the board.
A large percentage of newspaper income is derived from classified advertising, especially in the regional press; many newspapers are maximising the power of the Internet to realise even greater value from this revenue stream, with major acquisitions being made by the larger newspaper groups in this area.
However, falling circulation figures are of concern to the industry and newspapers are using ever more sophisticated techniques to boost these figures. DVDs, for example, lend themselves readily to newspaper cover mounting and are also being used as a vehicle for advertising. Cover sales are proven to increase when newspapers run both DVD and CD campaigns alongside other marketing initiatives, which include the traditional competitions. Another boost to newspaper circulation figures in 2005 has been the Sudoku phenomenon. Sudoku is an addictive game for its devotees, as much as their daily crossword, but may serve only to keep existing readers buying their daily newspaper, rather than attracting new readers.
Readers, especially older ones, are not migrating away from newspapers to the Internet as rapidly as might have been predicted: exclusive research commissioned by Key Note for this report shows that the number of respondents turning to newspapers\' online sites is very small - just 5% agreed with the statement `I often visit newspapers\' websites to get more information on things that interest me\'. This is 2 percentage points fewer than those that agreed in the same survey conducted in 2003.
Nonetheless, it is older readers who are more wedded to their newspapers - both national and local. As might be expected, the younger age groups are more likely to use the Internet, or their mobile telephones, to learn of news that interests them.
Despite falling circulation figures, people\'s appetite for news is unquenchable. News can be delivered to anyone at any time as the stories break. Advances in search-engine technologies allow for a continuous searching of news sites across the globe for the harvesting of headlines to be aggregated and delivered to customers in real time. News aggregation is attracting a new breed of news distributor - Internet service providers (ISPs) and search-engine developers - with MSN, Yahoo and Google all active in this market.
News agencies themselves, which, like newspapers, employ journalists to collect and write news, also use news-aggregation tools in order to deliver news to their customers. This report includes a new section on news agencies, as well as profiling leading organisations in both this market and that of news aggregation.
Arguably, one of the most important developments in the newspaper industry in 2005 has been The Guardian\'s change of format, from broadsheet to `Berliner\'. It is the first newspaper to be published in this size - slightly bigger than tabloid - in the UK, although the format is used for several newspapers in Europe. The format was introduced in September and The Guardian has reported a positive effect on its circulation figures.
A further important development was the purchase of The Daily Telegraph by Sir David and Sir Frederick Barclay. As will be seen from the comprehensive newspaper history given in Chapter 2 - Strategic Overview - of this report, major national newspaper groups have not changed hands very often in the previous 100 years. This sale thus marked the final demise of the Hollinger Group in the UK.
A further demise was Fleet Street itself. Reuters, the famous news agency, finally left `The Street of Shame\' in 2005 in order to take up new headquarters in Docklands. Reuters is profiled in Chapter 9 - Company Profiles.
This report also looks at news from a global perspective. New technology allows the gathering of news from all corners of the globe, including from individuals\' weblogs (blogs). Yet there are many places where journalists risk their lives in gathering and writing the news. During the compilation of this report in November 2005, the newspaper industry was relieved that a kidnapped Guardian journalist, reporting in Iraq, was released without harm. However, many others have not been so fortunate and these sacrifices are not forgotten. This report acknowledges the work of those agencies working to maintain and extend the freedom of the press.
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