Newspaper ad spend tipped to fall 20 percent
Tue, 31 Jul 2012 8:30a.m.
Newspaper advertising in New Zealand will continue to fall over the next four years and media companies will only partially make up the lost ground from increased digital spending, according to PwC.
The accountancy firm's entertainment and media outlook report says newspaper advertising spend is forecast to fall to $483 million in 2016 from $603m last year and down from $840m in 2007.
Newspaper circulation spend would rise to $286m from $257m over the same period, reflecting price increases and continued efforts to boost subscription numbers, it says.
Daily print circulation for newspapers is forecast to fall to 580,000 by 2016 from 633,000 in 2011, while daily digital circulation is seen climbing to 59,000 from about 1,000 last year.
"Newspaper publishers continue to wrestle with the issue of how to replace falling revenues from declining circulations and the resulting lower advertising volumes while giving away news for free online," PwC says.
"News sites have so far fallen short of replacing the lost revenue, either by way of advertising or online paywalls to news content."
New Zealand's major newspaper groups, Fairfax Media and APN News & Media, have written down the value of their publishing assets with the decline in ad revenue.
The PwC report forecasts digital paid circulation spending will reach $1m for the first time in 2012 and climb to $7.6m by 2016, though some of this will go to offshore media that attract New Zealand subscribers, such as the Australian Financial Review, the report said.
The report notes that the decline in local newspapers has been less severe than in other countries such as Australia, and this may reflect a tradition of local titles in regional centres with limited competition, which has resulted in a loyal readership.
Across the media and entertainment industry, revenue grew 4.3 percent in 2011 and PwC says growth is expected to continue through 2016 at an average 5 percent pace.
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