Business Model Evolving, Circulation Revenue Rising
April 18, 2014
Circulation revenue for U.S. newspapers recorded a second consecutive year of growth, rising 3.7% to $10.87 billion in 2013, according to preliminary data compiled by the Newspaper Association of America.
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 2012.
Proceeds grew in several other categories — digital advertising, direct marketing, and other, newly-developing sources — while income from traditional print advertising channels declined. This trend reflects an industry evolving its business model in a significant way, taking advantage of developments in technology, consumer behavior, and advertiser interest, to grow audience and diversify its revenue stream.
- 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 $23.57 billion in advertising represents 63% of total revenue in 2013, declining 6.5% from $25.2 billion in 2012. Traditional print advertising was reduced by 8.6% 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%.
- Revenue from direct marketing rose 2.4%, to a projected figure of $1.4 billion. Advertising in niche publications and non-daily newspapers slid 5.8% to an estimated $1.45 billion. (The projections do not include revenue from weekly newspapers not owned by companies producing daily newspapers).
- 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. As noted previously, 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%.
Please note: 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.
Contact Jim Conaghan, NAA vice president of research, email@example.com.
First Published: April 18, 2014