With inflation rising, possible recessions looming and the ongoing situation in Ukraine, the short-term business sentiment in the news publishing industry has taken a downturn, according to the first results of WAN-IFRA’s global industry survey. That said, publishers have managed to adapt and innovate during the pandemic and those efforts will pay off in 2022 with markedly increased total revenue – critically, developing new revenue streams.
“Some publishers are actually quite bullish about the future – and certainly they have transformed their businesses, probably built around data, to be in that position.”
The industry is indeed expecting a particularly challenging period on the horizon, at least compared to the same time last year: more than half (55.4%) of news publishers report feeling pessimistic about their business prospects for the next year. When asked about the next three years, the level of optimism increases but only slightly.
It is a stark change compared to last year, when over 80% said they were optimistic about the next 12 months.
”It is no secret that for the next 12 months and into 2023 most industries are expecting continued difficult times, and the news industry is certainly no exception. The rising costs of energy, for example, will continue to have an impact on printing and distribution costs,” said Dean Roper, Director of Insights and Editor-in-Chief of WAN-IFRA.
“Our latest study shows that these are concerns for publishers around the world, but we also see that some are actually quite bullish about the future – and certainly they have transformed their businesses, probably built around data, to be in that position.”
The change in business sentiment is one of the main findings from the upcoming World Press Trends study. The analysis of the full results is still underway, but Roper presented a few early takeaways to the participants of WAN-IFRA’s World News Media Congress 2022 in Zaragoza.
Although optimism has declined overall, the data shows that there is this group of publishers that remain quite optimistic, especially when asked about the next three years. For this upbeat minority, the current challenges have not undermined their faith in the long-term future of their businesses.
Other initial results from the World Press Trends survey include:
- Investments in new revenue are starting to pay off: Digital reader revenue and digital advertising continue to grow at double-digit rates – 16.0% and 10.3% respectively. But revenue from other sources has now become the biggest area of growth (21.5%). As discussed in the previous World Press Trends report, publishers have been investing heavily in diversifying their revenue structures over the last few years, and these investments are now seemingly bearing fruit. Among new sources of revenue, publishers highlight events as a particularly important activity.
- Fast revenue growth expected in 2022: Compared to 2021, news publishers are more optimistic about their revenues as their growth is expected to more than double this year (+7.3% in 2021 compared to +16.4% in 2022). This growth is mostly driven by the publishers in developing countries, who on average reported higher expectations for revenue growth in 2022 (+24%) than their peers in developed countries (+8%).
- The traditional revenue streams remain crucial: While print revenues either decline (print advertising) or stagnate (print reader revenue), in the big picture print remains a central revenue source for a large group of publishers around the world. At the moment more than half of publishers’ income (on average 55%) comes from print activities, according to the survey results. Over the next 12 months, publishers said that most of their revenue will come from advertising (40.9%), followed by reader revenue (32.8%) and other sources (23.9%).
- Past and current challenges helped crystallise key investment areas: As publishers have learned to innovate and adapt during the challenging past couple of years, some investment areas are starting to stand out. Product development and R&D have become top of mind for publishers, followed closely by investments in their revenue models. As for investments in technologies and products, data analytics is the main area where publishers continue to invest in, while video and audio publishing are also seeing significant investments.
“It is becoming increasingly clear that perhaps the most crucial foundation for a sustainable business is the relationship publishers build with their audiences and consumers, and at the heart of that is a comprehensive data strategy – especially first-party data,” Roper said.
About the survey
167 news executives from 62 different countries took part in the World Press Trends Outlook 2022 survey in July–September 2022. The full World Press Trends report will be published at the end of the year, and it will include more details about these initial survey findings as well as drawing further insights from additional sources.