Attention, newspaper fans. The time may be coming when you can put away your sorrow over the death of newspapers. Said obituary may have been written prematurely, according to a new report from the Newspaper Association of America (NAA). New revenue sources are growing so quickly for the industry that they now nearly neutralize losses from print advertising.
The report, The American Newspaper Media Industry Financial Profile 2012, does find that advertising revenue continues to decline. Last year, the loss was 6 percent. But the good news is that other newspaper revenue categories are on the rise.
For the first time in a decade, circulation is going up, by 5 percent. New revenue sources that do not involve circulation or advertising are increasing, including e-commerce transactions and digital consulting for local businesses. Three billion dollars in revenue, currently representing about 8 percent of all newspaper revenue, did not even exist as newspaper categories a few years ago.
The traumatic, near-death evolution of newspapers is dramatically changing their balance of revenue sources. The report said that about 40 percent of revenue is now from non-advertising sources, compared to only 20 percent in recent history.
Overall, the revenue composition breaks down as 27 percent of total newspaper media revenue is from circulation, 8 percent from new revenue sources, 11 percent from digital ads, 8 percent from niche publishing and direct marketing and 46 percent from print ads.
E-Commerce, Digital Agency
All digital revenue, including digital circulation, ads, e-commerce, digital marketing and other sources, made up 11 percent of total revenue for the 13 surveyed companies that broke out digital. By individual companies, the percentage of digital revenue to total revenue ranged from a low of 8 percent to a high of 29 percent.
Other stats also showed the growing importance of digitally-based revenue. For the companies that supplied digital breakdowns, digital-only circulation revenue grew 275 percent, and print/digital bundled circulation jumped 499 percent. More companies are bundling digital and print, which was one of the reasons that print-only circulation dropped 14 percent.
E-commerce revenue grew 20 percent, and revenue from digital agency consulting for local businesses grew 91 percent. Mobile ad revenue, when it was separately reported, is still tiny, at less than 1 percent of the total, although that figure doubled in 2012 over the year before.
Building on Strengths
Digital agency work often involves newspapers helping local businesses market their products
through social and mobile channels. Another area where the report said there is large potential growth is in e-commerce, with newspapers helping businesses connect directly with consumers through digital channels. Other growing categories include event marketing where newspapers produce events related to their core coverage areas, commercial delivery of other products that utilize newspapers’ delivery resources, and commercial printing jobs using newspapers’ printing presses.
These stats, the report said, “portray an industry that, faced with significant disruption in the last decade, has begun to measurably change its essential revenue model” by relying more on circulation, digital channels and the creation of new revenue sources.
Caroline Little, President and CEO of NAA, noted in a statement that, as they transform themselves, newspapers on building on their strengths. “In virtually every community they serve,” she said, “newspapers have the biggest newsroooms, the best-known brands and significant audience market share.”