This year’s World Press Trends study makes for a sobering read after the optimism of our previous report. The mood in the industry has changed, and publishers find themselves in a more unpredictable business environment due to a number of challenges, including high levels of inflation, rising paper and print costs, as well as ongoing changes to advertising markets.
The change in business sentiment is one of the main findings of the new World Press Trends Outlook report. As in the previous years, the analysis is based on an online survey distributed to industry leaders. 167 news executives from 62 countries took part in the survey in Fall 2022 – a big thank you to them for sharing their insights, results and strategies.
WAN-IFRA also works with PricewaterhouseCoopers (PwC) and Zenith for key performance indicators (global revenues and circulation). For audience insights, we work with analytics specialist Chartbeat.
Here are some of the main findings and charts from our new 2022–23 research. WAN-IFRA Members can download the full report here.
Business confidence takes a blow
The several ongoing challenges and risks have taken their toll in terms of business sentiment, as more than half of our respondents (55.4%) said they were “pessimistic” about the next 12 months. This represents a significant shift from the COVID bounce of our previous report, as last year over 80% said they were optimistic.
The mood is somewhat more positive when publishers consider their medium-term prospects, as the level of pessimism drops slightly (46.4%) when survey participants were asked about their outlook for the next three years. But there is also a group of publishers who view the future with strong positivity: almost a third (31%) indicated that they are “very optimistic” about where their businesses will be in three years’ time.
Revenue growth largely driven by developing economies
On the other hand, and despite the rather pessimistic outlook, publishers are on the whole bullish about their revenues – and more so than last year. For 2022, our respondents projected their revenues to grow by 16.4% compared to 2021. Last year, respondents anticipated revenues to grow by 7.3% year-on-year.
A closer look at the data shows that especially publishers in developing economies have high expectations for their revenue development. Companies in these markets expected revenues to rise by 24% year-on-year for 2022, while respondents from developed economies said they expected revenues to grow 8% for the same year.
Revenue diversification fast underway
As for their business model, publishers say that advertising and reader revenues remain the most important revenue sources, accounting on average for 47.7% and 35.8% of their earnings respectively.
Meanwhile, revenues coming from new types of activities (such as events, contract publishing and e-commerce) account for 16.7% of total earnings, up from 13.2% last year. Publishers also said that their revenues coming from new activities increased by 21.5% over the last 12 months, making it their fastest growing area for revenues.
Although declining, print continues to have a key role: combined, print advertising and print circulation generate more than half (53.5%) of the total income seen by our respondents, down from 56.1% last year.
Editorial and Product top areas for expenditure and investment
As in previous years, editorial and content costs are the largest area of expenditure for news publishers, accounting for 32.4% of total expenditure, broadly the same as in the previous year.
Print costs, however, have seen substantial growth: they now account for 19.6% of costs, up from 14.5% last year, most likely a result of increases in energy and material costs globally.
In terms of investment areas, our respondents indicated product development and R&D (88%), as their top priority, followed by reader revenue and other revenue streams, as well as investment in advertising (all 84%).
Looking ahead: Focus on AI and Events
Given the current level of attention on new AI tools, it is perhaps not surprising that many publishers see AI as a game changer among new and emerging technologies: over two-thirds (69%) said AI would have the biggest impact on their business in the next two to three years. Other technologies that publishers are following closely include 5G (28%) and the Metaverse (16%).
As for the future evolution of their business model, publishers expect diversification to continue fast, anticipating new revenue sources to become an even more substantial part of their revenue structure. Our respondents said they forecast nearly 24% of their overall revenue to come from non-reader and advertising sources in the next 12 months.
Within the category of new revenue sources, Events remains the most important area, with about a third of respondents both in developing and developed countries highlighting it as a focus activity in the near future. E-commerce, partnerships with platforms and membership models follow it as other new revenue streams that publishers expect to be focusing on in the next 12 months.
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