30 Years...

... Till Online Represent 50% of Total Newspaper Revenues

Merrill Lynch analyst Lauren Fine's report on the state of the newspaper industry says that even as online rises in importance, the proportion is still small overall. “Even if we assume double-digit growth for online ad revenues through 2012 and then 5% thereafter, while print ad revenues drop by 1.5% annually, we do not see online representing over 50% of total newspaper ad revenues until more than 30 years from now. (Of course, we can get there sooner if print declines faster.) In terms of EBITDA, even if we assume 50% margins for online ad revenues and 25% for print (but declining slightly every year), a back-of-the-envelope calculation suggests that industry EBITDA will be flattish for the next 20 years, supporting our assumption of flat to slightly declining perpetual free cash flow for the industry.”

This study has fueled much debate. You can read the unedited article and comments on the report here

53% editorial: 47% advertising

The MPA Handbook:Comprehensive Guide 2006/2007 available for free download at MPA is a good source to help understand editorial and advertising trends shaping the magazine industry.
Here is an interesting piece of info about the editorial:advertising pages ratio.
I was taught in my journalism course that no editor must allow advertising team to push more than 40 percent of pages as ads in the magazine. Editorial must dominate, but the trend for the last few years has been slightly different. The graph shown below (Page 9 of the handbook) shows that the ratio has been dangerously close to 50:50 for at least 5 years in the deacde span shown here. In fact, in 2005, the ratio for consumer magazines was 47% advertising pages, 53% editorial pages.


The Handbook also lists facts like:

1) Consumers find magazine advertising acceptable and enjoyable compared to advertising in other media. They also find magazine advertising less interruptive.
2) Consumers value magazine advertising, according to numerous studies. When readers were asked to pull ten pages that best demonstrate the essence of their favorite magazines, three out of ten pages pulled were ads.
3) Magazine advertising moves readers to action: More than half of readers took action on magazine ads or had a more favorable opinion about the advertiser, according to research from Affinity Research.
4) Magazine advertising improves advertising ROI: Multiple studies have demonstrated that allocating more money to magazines in the media mix improves marketing and advertising ROI across a broad range of product categories.
So and so forth!

This type of research would makes one doubt the 'fall in advertising pages for magazines' stories that crop up every quarter!

46% say 'no' to print

In a survey commissioned by Texterity and certified by BPA Worldwide, 46% of the readers of digital magazines say they no longer use, or infrequently use, the print version of the magazine.