This month WAN-IFRA released their World Press Trends Report for 2021-2022. We have fine-combed through all 76 pages of rich content, taken from the World News Publishers Outlook Survey, to provide you with our must-see moments.
Digital revenue continues to rise
Digital revenue is rising. In fact, digital remains the key revenue driver for growth. Thanks to the greater focus around digital products, accelerated somewhat by the pandemic, revenue models are starting to adjust. Digital promises to be the key revenue driver over the coming years. Publishers are becoming digital hubs and they are transitioning to become a better partner in life. For 2021/2022, publishers reported a 16.5% increase in digital ad revenue and a 14.3% increase in digital readership revenue.
The size of this continued all round digital growth above is interesting as most publishers embarked on their digital shift due to the pandemic in 2020. This digital revenue increase is also seen in the overall revenue figures for 2021-2022.
Digital paid news circulation grew overall by 3.4% YoY totalling an audience of 52.5 million subscribers. This growth represented a circulation revenue of $7.5 billion, up 8.3% YoY from 2020-2021. This overall growth has slowed compared to the 23% growth publishers saw in digital circulation and revenue in last year’s report. This astronomical growth over the last 2 years gives hope to publishers. People are willing to get behind their digital business models.
But, whilst these do represent positive digital trends for publishers, it could be easy to get carried away. According to WAN-IFRA, “digital growth is someway behind the overall market curve, suggesting that digital optimism among news publishers should perhaps be a little muted”. For publishers, this shows the shift to digital is not yet complete. More work needs to be done.
Print still makes the most revenue with potential for digital conversion
According to this year’s report, print is not yet done. Whilst print saw a significant drop-off in revenue and circulation of 13% in 2020, the more relaxed restrictions around the pandemic have allowed for a mini pickup of print products. As seen in the chart above, print circulation is up 2.3% YoY. This generated a print revenue increase of 1.1% YoY. This mini revival shows a return to normal lifestyles for some, but it exposes a key problem still facing publishers. The sheers size of the revenue generation and circulation is still vastly superior to digital.
Print circulation still makes up $54.6 billion of publishing’s overall revenue. This is over 7x greater than digital revenue and represents 56.2% of publisher’s income for 2022. In terms of daily unit circulation, print editions make up over 10x the number of digital units. Print is still a dominant force despite its difficulties, but with its fluctuating nature can publishers rely on it? This is important for publishers as clearly there is huge potential to convert this print audience to digital to provide a more sustainable revenue flow.
Whilst it may offer short-term fixes, print remains a difficult tool for long-term strategies. Publishers are increasingly aware that print is still a costly process. Print production makes up 14.5% of current costs for publishers. This is significantly more than the 4.8% of product and 11% of IT and Technology.
67% of publishers plan to divest in print production
Away from the increasing trend of cutting print days, publishers are actively planning to divest in print over the course of the next 12 months. 67% of publishers plan to divest in print production, the only area with a negative skew.
FTI Consulting told WAN-IFRA:
“It is essential to get prepared now to become as digitally ready as possible — a critical lever in reducing risk during a newspaper’s print-to-digital transformation.”
This is a topic we discuss frequently with publishers around the world. Driving growth through a quality print-like product such as an edition is an important lever for this transition. To do this, publishers need to reprioritise their investment and understand their audience demands.
This is demonstrated by the fact that 89% of publishers plan to invest their money in data analytics and intelligence. To give their audiences an experience worth paying for, 86% plan to invest in product development and R&D and 73% are prioritising investment in automation, AI and machine learning. These digital focused products are central to the progression of successful digital transformation journeys. They also demonstrate the commitment of publishers to their digital products.
Publishers are positive about their digital transformation and the future
Publishers’ commitment to digital is reflected in the self-assessed progress of their digital transformation journeys. 49.1% consider themselves to be at an advanced or very advanced stage of their digital transformation compared to their market or region. Of the remaining publishers, just 10.9% feel that they are at a nascent stage or are seriously lagging so still have work to do.
This positive sense around the status of digital transformation is reflected in how publishers feel about the future. Just 12% feel pessimistic about their business prospects over the next 12 months, with the number rising slightly to 16% for their prospects for the next 3 years.
The overall results show an overwhelmingly positive feeling for publishers’ futures. Almost 50% of publishers are between neutral and very optimistic (7-8) for the next 12 months, and that tale is similar for their 3-year outlooks with over 40% in the same bracket.
The impact of the pandemic clearly stood out as a reason for this positivity. 2 reasons for this particularly stood out:
- “After the COVID curveball of 2020 companies feel more prepared (and incentivised) to tackle long-term strategic challenges”.
- Whatever happens – nothing will be as bad, or as challenging, as what news publishers had to contend with at the start of the pandemic.
No matter what comes, publishers clearly feel positive about the future. The pandemic has provided a pertinent mindset shift and publishers are preparing to take full advantage. Digital is clearly the future for publishers and this is reflected in their priorities and new revenues. Whilst print still boasts a strong revenue base, there is great potential for publishers to shift this to digital with the right products and strategy.