Global State of Consumer Publishing

PricewaterhouseCoopers, one of the big accounting firms, released a report on the state of global consumer publishing. When you look at the results, they may leave you wondering just how bad, or good, things are. For example, the total market has grown about 13 percent over the last five years. Good right? Well, not really, because you have to see these things in context, and in this case, context is how businesspeople and investors look at numbers:

• The growth was about a 2.6 percent per year over the five years.


• The real boost was advertising revenue, at a compound annual growth rate of 4 percent. But circulation revenue grew by only 1.9 percent.


• PwC expects 18.6 percent growth in the industry over the next five years, with advertising representing most of that.


• But online advertising is growing a lot faster: a compound annual growth rate of 38.1 percent from 2004 to 2008. As a comparison, print advertising was up 4.4 percent and newspaper advertising by 2.4 percent.

The problem this creates for publishers, at least those that are publicly-held, is that investors like high growth. That's because high growth businesses rapidly increase in value, creating the possibility of selling investment and getting a good return on the money they put it originally. It's not that consumer publishing is moribund, but that it can't grow fast enough to suit investors, and so managers feel pressure to "improve" performance. That's why you can expect to see more budget cutting in all areas, including personnel. My bet is that at a lot of publications, that will actually mean less staff and fewer freelance assignments. Management is happy to take staff, stretch them thinner, and then require more from them. That's one way to make more money from the investment, improving return to court investors.

Some other things to learn from the study:

• Most consumers like print, but many are also interested in interactive digital content.


• Younger consumers want all content online.


• People will pay for digital content at most half of what printed content brings. Although publishers might want to call this a reason to drop freelance rates, there's a lot of cost to a printed pub that simply goes away. That's got me wondering whether online pubs, given more development of ads, might be more profitable than print.


• North American and British publishers expect to derive a fifth of their revenue from digital publications within the next five years. Europe as a whole lags behind.


• The most successful at making the switch are those that "leverage strong brands across multiple media platforms and generate revenues from online advertising, search-engine marketing and e-commerce." In other words, the publishers that have best shifted online are the publishers that have been most successful at it.