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Newspapers

Executive summary

After a period of decline in the printed distribution of newspapers, the Australian newspaper landscape during COVID-19 continues to change rapidly with advertising revenue declines driving the closure of printed titles, and an industry-wide focus on digital transformation and the monetisation of the valuable digital news formats.

“Trusted sources of news content” continues to be a critical focus for this sector and an essential part of their value proposition for readers who now get much of their ‘news’ from social media platforms.

Total newspaper revenue will fall from A$2.653b in 2019 to A$2.235b with the increase in revenues from digital subscriptions and digital advertising helping to offset the declines in print.

Forecasts at a glance

Print Newspaper Advertising Market (A$ millions)

*2018 figures have been updated to reflect recently available market information

CAGR 2019-2024 based on gradual recovery trajectory

Print Advertising -14.43%

Print Newspaper Circulation Market (A$ millions)

*2018 figures have been updated to reflect recently available market information

CAGR 2019-2024 based on gradual recovery trajectory

Print  -5.94%

Digital Newspaper Advertising Market (A$ millions)

CAGR 2019-2024 based on gradual recovery trajectory

Digital newspaper advertising -0.40%

Digital Newspaper Circulation Market (A$ millions)

*2018 figures have been updated to reflect recently available market information

CAGR 2019-2024 based on gradual recovery trajectory

Digital 11.93%

Total Newspaper Market (A$ millions)

*2018 figures have been updated to reflect recently available market information

CAGR 2019-2024 based on gradual recovery trajectory

Total -5.12%

COVID-19 has driven record-breaking news consumption amongst Australians, with digital news consumption surpassing print.

For the 12 months ending March 2020, Australian news media outlets have recorded their strongest readership since Enhanced Media Metrics Australia (EMMA) began recording consumption in 2013, with an average of 18.2 million or 96 percent of Australians being reached via news platforms.19

This has been driven primarily by digital consumption, with Nielsen reporting that Australians have spent almost the same time consuming online news content between the months January to August 2020 as they did for the whole year in 2019,20 and ABC News websites consistently delivering the highest unique audience throughout the bushfires and then the pandemic.21

In order to satisfy Australians’ requirement for news updates regarding the ongoing pandemic, many local news publishers offered free coverage of the COVID-19 pandemic via live and regularly updated blog posts.

In response to declining revenue, the industry has focused on efficiency programs to adjust to the new environment.

News Corp recently announced the acceleration of their digital transformation program with a total of 112 community and regional print newspapers, which have been most affected by structural headwinds, ceasing to be printed. Of these, 36 will close altogether, and 76 will remain as online mastheads.22 News Corp are not alone in their efficiency programs; in May, Buzzfeed announced the permanent closure of its Australian operations,23 and in July, Australian Community Media (ACM) executive chairman Antony Catalano announced the closure of four print centres,24 securing a deal with News Corp to use each other’s printing networks to drive economies of scale. Major players including Nine, News Corp and ACM have all reported redundancies across their network to further combat declining revenues and adjust to the impact of COVID.

In June, Australian Associated Press (AAP) newswire was sold by previous owners including News Corp and Nine to a group of philanthropists with a common "desire to protect media diversity in Australia through ensuring the long-term sustainability of the AAP newswire and its provision of independent, quality journalism on issues that should matter to all Australians".25 In September, just one week after AAP launched a crowdfunding appeal to sustain the newly turned not-for-profit company, the Morrison Government announced a $5m grant as part of its Public Interest News Gathering (PING) program, ensuring fact-based and independent journalism remains accessible to Australians across the country.26

Concurrently, 2020 has seen a renewed focus on growth strategies via the acceleration of digital transformation. The ability of the news media outlets to successfully convert newly acquired digital news audiences to subscription models will also be central to future growth.

Concurrent to these efficiency programs has been a renewed and relentless focus on digitisation, including Nine’s restructure which was implemented “to better service the needs of our clients in a more integrated fashion across television, digital, publishing and radio”,27 News Corp’s “focus on acquiring digital subscribers and audience, while right-sizing our business to be digital first”,28 and ACM’s move to bundle print and digital advertising via realestateview.com.au listings in key property markets.29

Based on current forecasts, digital subscription revenue is expected to grow from A$304m in 2019 to A$364m in 2020, and by 2024, is predicted to continue growing to A$535m, at a CAGR of 11.93 percent.

The New York Times has set the global precedent for the sector, growing its digital subscription base from 600,000 to 5.7 million between 2012 and 2020 after pursuing a relentless focus on premium-content, including launching new products such as NYT Cooking, Wirecutter (a product review site), and New York Times Crossword.30

The future distribution of news via social media platforms remains to be seen. The impact of the tech giants on the news media took centre stage in July 2019, when the Australian Competition and Consumer Commission (ACCC) published its final report regarding the digital platforms inquiry.31 More recently, the Australian Government has announced a code that would require Google and Facebook to compensate content providers for the articles that appear on their sites.32

The original ACCC report made 23 recommendations to increase regulation of digital players, with the intention of improving media competition and data privacy. Other recommendations included taxpayer funding for local journalism, and making tax-deductible any donations to not-for-profit organisations engaging in public-interest journalism.

Following the report, and amid ongoing concerns surrounding the future of independent journalism due to financial pressures that publishers are experiencing, the ACCC has drafted a code that will require Google and Facebook to compensate content providers for the articles that appear on their sites. The responses from both Google and Facebook has been swift and direct, with Google releasing an Open Letter to Australians, citing that the proposed changes will “[put] the Google services [Australians] rely on at risk”,33 and Facebook stating that they “will reluctantly stop allowing publishers and people in Australia from sharing local and international news on Facebook and Instagram”.34 Globally, many countries are watching this ongoing debate with interest as it goes to the core of the value proposition for both the news companies and the digital platforms.

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