Print shrinks as advertising goes online

Norwegian media group Schibsted presented their quarterly results in Oslo on 7 November, but had no good news for those who love printed newspapers. Schibsted owns four of Norway and Sweden’s largest newspapers: Aftenposten, VG, Svenska Dagbladet and Aftonbladet. The group also owns several regional Norwegian newspapers and publishes the free newspaper 20 minutes in France and Spain. 

The large printed newspapers’ advertising income during the latest quarter alone has shrunk by 100mn Norwegian kroner (€13.7mn). Meanwhile revenue from the group’s digital business has increased by 16 percent. This is because the company is Europe’s largest seller of classified ads, with sites like Leboncoin in France, Infojobs in Spain and Subito in Italy - all build on the same platform as Sweden’s Blocket.se and Norway’s Finn.no. 

Income from these sites also means other European newspapers earn less. Why pay for classified ads when you can use a site where private individuals can advertise for free?

This means Schibsted is not just affected by changes to the environment in which newspapers operate - they are also helping drive the development.

Along with Schibsted’s gigantic 400m Norwegian kroner (€54.8m) saving plan for their newspapers (as presented in the second quarter) there was no further bad news for the already battle-hardened journalists. But nothing indicated the cuts would be put on hold either. 

“Our answer to the major changes is to strengthen our digital business and to significantly reduce costs in the print sector. The process of change is challenging for the media house and for our employees, but it is very important that the process continues unabated,” said Schibsted CEO Rolv Erik Ryssdal.

The management on newspapers around the world are delivering similar messages, like in Spain where 8,000 journalists have already lost their jobs despite some, like those at the largest newspaper El Pais, agreeing to a 15 percent pay cut.

But not only newspapers are hit. Respected weeklies like Newsweek are closing their print editions to go purely digital. Printers are fighting over jobs and there is already massive overcapacity. Book publishers are fighting to stay afloat in the same flood where paper is being swapped for ones and zeroes which are then turned into letters and pictures on tablets and smartphones. 

Anyone thinking this is just a temporary dip could have a look at this graphic:

It shows the steep decline in advertising income in the USA since 2008. The numbers have been adjusted for inflation and speak for themselves. It took 60 years to build advertising income from $20bn in the 1950s to $65bn. The great fall came in the wake of 2008. In just three years advertising income fell back to 1950s levels. The red line is the newspapers’ income from digital products. 

The situation in the Nordic countries is not quite that dramatic. Nordic citizens enjoy a better economy, are more conservative in their media habits and the newspapers enjoy state support and VAT exemption.

It might seem unthinkable that printed newspapers should disappear - at least for those of us of a certain age who can’t eat breakfast without inky fingers.

But what happened to the phonebook and encyclopaedias? Most people manage perfectly well with the digital alternatives which sidelined the print versions.

Circulation figures for the five largest newspapers in each Nordic country speak for themselves - see the column on the right side! This is a trade which is shrinking faster than a wooly jumper on a 60 degree wash.

Compared to 2007, the year before the finance crisis hit and before the launch of the first Ipad, the total circulation of the five newspapers had fallen by 250,000 - or 20 percent.