A study conducted by consulting firm PwC confirms what a many publishing leaders already know: As advertising and circulation revenues decline, diversification becomes a business imperative. “Advertising for print is down. Circulation is down. Revenues are projected to be flat,” says PwC partner Greg Boyer. “To make up for these declines, magazine publishers need to innovate in a variety of ways.” In particular Boyer sees mobile and video as a bright spot for the publishing industry.
According to the Global Entertainment and Media Outlook 2017-2021 report released in June, the compound annual growth rate (CAGR) for magazine circulation and advertising revenue over the next five years is 0.19%. In terms of dollars, that’s a mere $300 million increase, approximately, in industry revenue.
PwC predicts that print advertising will take the biggest hit, with ad revenue for consumer magazines dropping from approximately $13.5 billion in 2017 to $6.7 billion in 2021. For B2B print ads, revenues are projected to decline from approximately $3.4 billion to $1.9 billion over the next five years. Digital advertising will offset these revenue losses, keeping ad revenue flat. PwC predicts circulation revenue will continue to decline for consumer magazines at -0.61% CAGR and grow for B2B publishers at 3.69% CAGR.