Over the past decade or so, a lot of traditionally paper-based industries have gone digital. This shouldn’t really be a revelation to anyone—banking, healthcare and media have all moved into the digital sphere in recent years.
But while some of these industries have made a quiet transition, slowly replacing paper records with digital ones and subtly updating technology as the old stuff becomes obsolete, other sectors have refused to go quietly. The newspaper industry, for one, has been dragged, kicking and screaming, into modern times.
Many journalists have taken to blogs and columns alike to mourn the death of the newspaper, and they aren’t too far off in their eulogizing of print media. The physical component of publishing, which includes paper, printing, and overheads, constitutes 50 percent of a newspaper’s operating expenses. As online platforms gain popularity, the expenses for print newspapers will increase, resulting in a decline in profitability for publishers. To counter this, many publishers are opting for digital publishing, as it’s cheaper and has greater reach than physical newspapers.
All this is boosting the Global Digital Newspaper Publishing Market. The market is expected to grow at a CAGR of 11.52 percent from 2014-2019, with massive media corporations like AOL, Fairfax Media, Gannett, Google, NBCUniversal, News Corp., Sanoma, Schibsted, The New York Times Company, and Yahoo all getting into the digital game.
On the consumer side of things, digital newspapers are becoming a popular option. Increased internet penetration, a growing number of tablets and cell phone, and an overall increase in time spent on digital media are all creating the perfect conditions for consumer uptake of digital papers.
However, while publishers and consumers are on side with digital newspapers, the global market is still facing its share of issues. TechNavio analysts have identified three key challenges that are expected to be barriers to more aggressive market growth over the projected period.
Decline in Advertising Revenue & Low Overall Digital Revenue
There’s so much more competition for a reader’s eye and attention online than there ever was in traditional print media, and this is affecting advertising revenue in the Global Digital Newspaper Publishing Market.
In 2014, the growth rate for advertising revenue in the market was 9.4 percent, and this rate is expected to decline to 5.2 percent by 2019. A lot of this can be attributed to the loss of classifieds, which have generally moved onto free online platforms.
Users also have a lot more control over what kind of ads they see and interact with online. A user can easily close an ad or browse news stories on a different webpage, if they don’t like that they see.
Overall, the gain in digital ads for newspaper publishers is far less than the losses in print advertising, resulting in an overall negative growth in advertising income for newspaper publishers.
Integration Issues
The effective use of a digital content platform requires integration with various channels, including online, mobile, and social media, which often involved high implementation costs.
In addition, for effective operability, vendors should be able to provide customer support for all platforms. This is making it difficult for small vendors to offer seamless publication applications for broadband-connected PCs, mobiles, and TVs because of business process issues and the huge investment and time required for effective integration.
Difficulty in Engaging Customers Online
Again, this challenge harkens back to the fact that consumers have so much control over what they consume online. We are inundated with so much information on a daily basis that most of us have built up filters for the kind of information we want to engage with.
And people are fickle—if a webpage/mobile application is not appealing (whether aesthetically or content-wise) right off the bat, then potential readers might head elsewhere.
This is forcing vendors to turn to SEO techniques to enhance their presence, and collect data from cache files and social networks to find out about customer preferences.
To sustain market growth, it is important for vendors to develop innovative solutions and take customer preferences into consideration. But developing new and technologically advanced products is a complex, costly, and highly uncertain process. Failure to understand customer requirements can lead to loss of time and money, and an eventual decline in market growth.
