Statistical, Ecosystems and Competitiveness Analysis of the Media and Content Industries: The Newspaper Publishing Industry

Economic characteristics and developments 
This study deals with newspaper publishers and how this sector is transforming as a result of 
digitization and more general economic and social changes. When assessing the state of the 
news media, other news providers, such as broadcasters, online-only news providers and 
citizen journalists are also important players. Online, they are increasingly becoming part of 
the same news market. In this report, these other news providers are taken into account as the 
competitors of newspaper publishers, but their market position is not described 
comprehensively in itself. The focus is on how digitization affects the legacy newspaper 
publishers, and how this particular industry responds to these changes. 
Newspaper publishing is characterized by high sunk costs (for investments in printing presses, 
ink and paper and for labour) and low marginal costs – therefore, market entry barriers are 
high. Newspaper publishers operate in a two-sided market; selling news to readers and selling 
readers to advertisers. Many of the large newspaper publishers are part of multinational media 
companies which produce different media (broadcast, print, digital).
Compared to other media markets, the level of concentration in the newspaper market is 
relatively low, with a few large publishers which are part of multimedia companies and many 
medium-sized and small publishers, especially at regional and local levels. Nevertheless, the 
concentration of newspaper publishers is ongoing, especially as newspaper publishers are 
increasingly having trouble in sustaining their business as stand-alone, individual businesses.

---

Statistical, Ecosystems and Competitiveness Analysis of the Media and Content Industries 
6
 
Between 1995 and 2007, the number of firms increased to 9,006. At the same time, the 
average number of employees per firm declined steeply - by 15.9%, compared to a decline of 
1.4% for the total EU economy. Newspaper publishing also showed a negative growth rate for 
value added between 1995 and 2007 of -1.1% on average annually for the EU27, compared to 
an overall growth for the total economy of 2.6%. 
The six countries with the largest share in the total value added generated in the European 
newspaper publishing industry are Germany, the UK, France, Spain, Italy and the 
Netherlands. All these countries, except Spain, witnessed declining or at best stabilizing 
figures in the share of value added in the newspaper publishing sector between 1995 and 
2007. 
In most EU27 Member States, circulation figures have shown a steady decline since the mid 
1990s.
3
Circulation only rose in some East European countries in the late 90s, notably in 
Bulgaria and Romania. The total average circulation of newspapers per day in Europe 
declined from 85 million on average in 2005 to 74 million in 2009. The US and Japanese 
newspaper circulation figures dropped as well. In contrast, circulation in India and China has 
shown a steep rise, probably as a result of increasing wealth and literacy and less competition 
from online news sources than in the US and Europe. 
Advertising expenditures in general grew between 1997 and 2007, as did advertising 
expenditures for newspapers. But after 2007, both experienced a sharp drop. While the 
advertising expenditures for most media recovered again in 2009, newspaper advertising 
expenditures remained low, revealing a more structural development. The share of 
newspapers in overall advertising expenditures had already been declining since 1999, with 
expenditures shifting to TV and the internet, again with variation in the patterns between 
individual countries. The internet is the medium with the largest growth in the share of 
advertising expenditure. In 2010, it ranked third worldwide with 11.9% of total ad spend, after 
TV and newspapers, and was predicted to grow to 13.6% (Zenith Optimedia, 2009).
Newspaper publishers have to some extent also benefitted from the rise in internet advertising 
through the revenues from advertising on their online publications. But the losses in print 
advertising have been far greater than the gains in digital advertising for newspaper 
publishers, resulting in an overall negative growth in advertising income for newspaper 
publishers. The decline in advertising revenues for newspapers can to a great extent be 
attributed to their loss of classified advertising, which shifted to specialized online market 
places, dating services, job recruitment and real estate websites. 
Despite declining newspaper readership, the demand for news has never been higher. In the 
US, while consumption of news from television, radio and newspapers has declined, 
consumption of news from the internet has grown. In Europe we see a similar pattern, though 
television has largely maintained its strong position. For the majority of people between 25 
and 65, television is still the most used medium for news consumption, but younger people 
(between 14-24 years) turn to the internet for news (Slot & Munniks de Jongh Luchsinger, 
2011a; Huysmans & de Haan, 2010; Eimeren & Vrees, 2011; Schrøder & Kobbernagel, 2010; 
Schrøder & Larsen, 2010).
The legacy broadcaster and newspaper websites are often amongst the most visited news 
websites, but aggregators such as Google News, Yahoo News, Digg and other online news 
providers are attracting increasing numbers of news readers. 
3
Circulation is the term used to describe unit demand for newspapers from sales on newspaper stands (and 
other sales points), through subscriptions and – in the case of free newspapers – from handing out units at 
railway stations, bus stops, universities, etc.

---