From the pandemic and war in Ukraine to the Westminster partygate saga, newspapers are enjoying a financially lucrative news boom. However, is the news industry enjoying a blow in the battle for survival against big tech, or is this proof that publishers have finally forged business models fit for the era? new media?
In a sign of changing fortunes amid unprecedented news events, The Times and Rupert Murdoch’s Sunday Times last week reported a doubling in operating profits to their highest level since 1990 and The Sun, a one-time cash cow that has become a high-profile victim of the digital age, is less than £1million away from returning to operating profit for the first time in a decade.
The newspapers’ parent company, News Corporation, whose executives have seen its market value double to $13billion (£9.9billion) since 2019, is the latest to reveal the significant financial boost thanks to information-hungry readers seeking trusted media in times of uncertainty. in record numbers. Other major news organizations are also experiencing a resurgence in fortune.
The New York Times hit its target of 10 million subscriptions three years earlieralthough partly thanks to the expenses $550 million to buy sports news subscription service The Athleticand its chief executive, Meredith Kopit Levien, said 2021 was the most profitable in many years.
The news rush helped the Financial Times and the Guardian surpass 1 million digital subscribers each, while the Telegraph reached 750,000 print and digital combined, at an average spend per subscriber of £172. And last year Reach, publisher of Mirror and Express titles, along with hundreds of regional brands including Liverpool Echo and Manchester Evening News, achieved their first like-for-like growth since 2007.
“One of the ripple effects of such an extraordinary news series is that it has restored confidence in the news industry that it has a role, a purpose and a community of people ready to help. ‘enjoy,’ said Douglas McCabe, chief executive of research consultancy Enders Analysis. “Before, every conversation was about the battle with Google, but now the head is up. For the first time, leaders can see, imagine, and imagine a future online.”
Despite this, Google and Meta, the parent company of Facebook and Instagram, remain formidable competitors for ad spend. In 2022, the Silicon Valley giants will make more than £16 billion in advertising revenue in the UK, or up to 63% of the total market, according to eMarketer. Meanwhile, the UK market for digital and print advertising in national newspapers and newspapers will be worth £1.5 billion, according to WPP’s GroupM.
However, the tectonic plates of the hitherto one-sided relationship have shifted significantly. Regulatory and lobbying pressures on both sides of the Atlantic have focused on creating a fairer level playing field.
In countries such as Australia, Canada, France and the United States, collective bargaining by publishers to improve the terms of business negotiations with online giants is either allowed or considered by lawmakers.
The European Union is advancing the Digital Markets Act and the UK competition regulator is setting up a Digital Markets Unit, both of which are designed to crack down on big tech companies and ensure fairer trade.
News Corp has publicly stated that it has reached agreements worth “nine figures” per yearwhile Google and Facebook have pledged $1 billion each over the next three years to pay news publishers.
“On the platforms where we distribute our content, we need to have a fair exchange of value,” said Dominic Carter, executive vice president and publisher of The Sun at News UK. “The value we create needs to be recognized and this is increasingly the case with the platforms we have relationships with. They are not the saviors of our businesses, but the relationship we have is much more equal than it has been.
The inexorable decline of print has accelerated during the pandemic – while also becoming much more expensive as newsprint prices hit three-decade highs amid soaring inflation around the world – with GroupM predicts that in the UK newspaper and magazine market, digital advertising revenue will exceed print advertising revenue by the end of next year.
“While there will be companies that exit, shrink or reduce the frequency of posting – there are plenty of weak players in general – there are those in a position of strength who will do well,” said Brian Wieser, the global president of business intelligence at GroupM. “The real trend that has emerged is that the media owners who have benefited are more global, while the majority are tied to one market. It is better to be global than national, and national than local. In general, strong editors come out the other side, while weaker ones keep going.
During the pandemic, The New York Times reported its best year ever for digital revenue, while crossing the milestone of digital exceeds print revenue for first time in 172-year history. In the final quarter of last year, News Corporation said digital advertising revenue exceeded Sun print advertising for the first time.
Yet some analysts say it’s less about the success of the digital strategy and more about the alarming state of print advertising. Revenues are currently on course to plummet from £6bn in 1999 to £1.2bn by 2026, according to GroupM.
“Having digital overtake print is a plus, not a minus for newspapers,” said Carter, who believed a platform for the future was now here for newspapers. “It’s a sign of success in businesses that we know we’re all in transition. There’s a rebalancing towards quality, context and data – we have it at scale in the logs.” But, a he added: “Are we saved? I wouldn’t say that any of us are not completely off the hook yet.”