The circulation of printed newspapers is declining everywhere in the developed world, and Hungary is no exception. To make up for lost readers and revenues, newspapers need to borrow business models from the service sectors.
I am an avid newspaper reader. I have piles of publications scattered around the house waiting to be read. I love the touch and the smell of magazines fresh off the presses and get excited every time my subscription arrives. Since I am a journalist, I read papers differently. I analyze the structure of articles, assess the text-to-picture ratio of pages and can easily distinguish between a paid and a barter ad.
Yet it doesn’t take an expert eye to spot the changes that have taken place in the print media recently. Some magazines have folded, others have decreased their frequency, and some have lowered their pagination.
It is not only the crisis that is to blame for the decline. The printed press’s struggle started well before that, with the switch from offline to online. So the findings of a recent study by WAN-IFRA, the World Association of Newspapers and News Publishers, on the status quo of the press may come as a surprise: newspapers still reach more people than the internet. Newspapers reach 2.3 billion people every day, 20% more than the 1.9 billion that the internet reaches worldwide.
But although papers may still reach more people, circulation in print is declining worldwide: dailies saw a 2% drop, from 528 million in 2009 to 519 million in 2010. (Circulation varies by region. For exact data, see table 1.) Digital newspaper readers have more than made up what has been lost to print. Digital audiences are typically one-third of print readership. So against a 2% decline, digital growth is significantly greater.
The significance of this does not lie in overall numbers, but in changes in purchasing patterns. To convince readers to come back, or online visitors to stay longer, the press must focus on more than content, such as investing in online services. Diversification is one of the few business models that have proved viable in any sector during the crisis.
Traditional content providers, media and newspapers should not get stuck toiling to increase readership. Instead, they should go into e-commerce or organize conferences, exploiting their extensive network and the inside knowledge they have in many sectors. Tying that to a reputable magazine brand, the outcome is likely to be positive. That is the path Sanoma Media and HVG are following, whose series of books (most recently on World Cuisine) and career fairs are popular because they are associated with a renowned publication.
Linking brands and related areas not only helps keep your customers, it also allows papers to charge more for advertising as advertisers get to be associated with the positive feelings readers have towards a publication.
Relying on non-advertising income is important since digital advertising revenues are not compensating for print’s lost ad revenues. At Sanoma Media, 30% of revenues come from digital, yet when it comes to profitability print takes the lead, said sales director József Steff at a roundtable at the Reklámkonferencia conference where representatives of the print and digital press discussed the difficulties the Hungarian media is facing.
Subscription fees are important as well; it is unhealthy to rely solely on ad revenues, noted István Tallósi, head of sales at Napi Gazdaság, at the same event.
Even if newspapers find the perfect model, it will take time to recoup the losses of the past couple of years. Tamás Hanák, head of advertisement at national daily Népszabadság is pessimistic: he believes the Hungarian press will have to endure at least two or three more years, probably more.
Next year will be a long tough one for the printed press in Hungary, all publishing executives agree. Clients will spend less than this year and in the years to come. That is the bad news. The good news is that with the consolidation of the printed press, surviving publications will receive more attention, earn higher esteem and provide increased value to advertisers. “To make consumers pay, we have to maintain the quality of content,” Steff noted.
So we had better keep up the good work.