The Guardian reports today that three national newspaper groups have seen their newspaper shares hit by fears over a downturn in traditional advertising revenue and the rise of digital. According to the paper
Trinity Mirror, the owner of the flagship daily and the largest regional newspaper group, sent tremors through an ad-dependent industry when it revealed a 12.6% fall in ad revenues over the past two months. Other regional publishers – Newsquest, publisher of the Herald and the Northern Echo, and Daily Mail and General Trust plc (DMGT) – also reported double-digit declines for May. Fears over Johnston Press’s future have been particularly marked with a 45% decline in its share price in just one week.
Fears are now growing that the industry will never go back to what it once was, that the rise of digital has changed the game. According to Sir Martin Sorrell, again in the Guardian
The pressure on the newspaper industry in western European markets is both structural, because of disintermediation by the web, and cyclical because of slowing growth rates. The cyclical part will return, the structural one will not. The simple fact is that more people are reading newspapers or newspaper content online, rather than offline.
There is also clear recognition that the majority of newspaper companies had pushed hard for a rapid growth of their digital business but a real sense that it was too little too late, again from the paper
All the major newspaper groups have sought to safeguard the loss of business by expanding online, not least by acquiring digital businesses. Trinity pointed out last week that digital revenues are still booming in spite of the woes elsewhere. But digital revenues made up just 3.7% of the company’s total revenues last year and 6.7% of advertising revenues.
The Guardian reports that online revenues are due to rise between 4 and 6 per cent. These figures do not tally exactly with those presented recently by Enders Analysis to an AOP board meeting which I attended but the migration of revenue from traditional to digital marketing budgets was clear.