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MP22071

MAPS NEWSPAPER INDUSTRY : OCTOBER 2001

Overview

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This report covers: newspaper industry, circulation trends, daily circulation, sunday circulation,advertising, promotion,branding, online ventures,

Companies covered include: Daily Mail & General Trust, Associated Newspapers, Daily Mail, Evening Standard, Northcliffe Newspapers, Financial Times, Guardian Media Group, Eastern Counties Newspaper Group, The Observer, The Independent, the Independent on Sunday, Johnston Press, News International, News of the World, The Sun, The Times, The Sunday Times, Newsquest (Media Group), Northern & Shell, Daily Express, Sunday Express, Daily Star, Regional Independent Media Holdings, Telegraph Group,Trinity Mirror, The Mirror, Sunday Mirror, Sunday People,

Table of Contents
Executive Summary
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TABLE OF CONTENTS

Executive Summary	1
1. Introduction	3
2. Strategic Overview	4
Market Dynamics and Segmentation	4
Segmentation	4
Advertising Expenditure	4
Table 1: Total Advertising Expenditure by Medium by Value
(£m and percent), 2000	5
Market Size	6
Table 2: The UK Newspaper Market at Current Prices
by Revenue (£m), 1996-2000	6
Figure 1: The UK Newspaper Market at Current Prices
by Revenue (£m),
1996-2000	6
Table 3: Indices of the Newspaper Market (index 1996=100),
1996-2000	7
Distribution	7
Trade Associations	8
Newspaper Publishers Association	8
The Newspaper Society	8
3. National Newspapers	9
Market Trends	9
Cover Prices	9
Saturday Editions	9
Readership	9
Table 4: Readership of National Daily Newspapers† by Gender ( percent), April 2000-March 2001	10
Figure 2: Readership of National Daily Newspapers† by Gender ( percent), April 2000-March 2001	11
Market Size	12
Table 5: Total Net Revenue of UK National Newspapers
by Sector by Value (£m and percent), 1999 and 2000	12
Table 6: The National Newspaper Market by Sector by Value ( percent), 1999 and 2000	13
Copy Sales Revenue	13
Table 7: Net Revenue from Copy Sales of National Newspapers by Sector by Value (£m and percent), 1999 and 2000	13
Advertising Revenue	14
Table 8: Advertising Revenues of National Newspapers
by Sector by Value (£m and percent), 1999 and 2000	14
Segmentation	15
Circulation Trends	15
Daily Circulation	15
Table 9: Average Net Circulation of National Daily Newspapers (copies per day and percent), September-February 2000 and 2001	15
Sunday Circulation	16
Table 10: Average Net Circulation of National Sunday Newspapers (copies per day and percent),
September-February 2000 and 2001	17
Competitive Structure	17
Table 11: National Newspaper Publishers and their Titles, 2001	18
Advertising and
Promotion	19
Advertising Expenditure	19
Table 12: Main Media Advertising Expenditure by Daily and Sunday Newspapers (£000 and percent), Year to June 2000 and 2001	19
Figure 3: Main Media Advertising Expenditure by Daily and Sunday Newspapers (£000 and percent), Year to June
2000 and 2001	21
Promotion and
Branding	22
Online Ventures	23
4. Regional Newspapers	24
Background	24
Table 13: Regional Press Structure by Sector
by Number of
Titles, 2001	24
Market Size	24
Table 14: Total Net Revenue of Regional Press at Current Prices
by Sector by Value (£m and percent), 1999 and 2000	25
Figure 4: Total Net Revenue of Regional Press at Current Prices by Sector by Value
(£m and percent), 1999
and 2000	25
Table 15: Copy Sales and Advertising Revenues as a percentage of Total Net Revenues of Regional Press at Current Prices
by Sector by Value ( percent), 1999 and 2000	26
Advertising Revenue	26
Table 16: Advertising Revenues of Regional Press at Current Prices by Sector by Value (£m and percent), 1999 and 2000	27
Figure 5: Advertising Revenues of Regional Press at Current Prices by Sector by Value (£m and percent), 1999 and 2000	27
Table 17: Regional Press Advertising Expenditure at Current Prices by Sector by Value (£m and percent), 1999 and 2000	28
Table 18: Regional Press Display Advertising Expenditure
by Category ( percent), September 2000-August 2001	29
Figure 6: Regional Press Display Advertising Expenditure by Category ( percent), September 2000-
Aug-01	30
Circulation Trends	30
Table 19: percentage Change in Circulation of Regional Press by Sector ( percent), 1999-2001	31
Table 20: percentage of Regional Press Titles Showing Circulation Growth by Sector ( percent), 1999-2001	31
Figure 7: percentage of Regional Press Titles Showing Circulation Growth by Sector ( percent), 1999-2001	32
Table 21: Revenue from Copy Sales of Regional Press by Sector by Value (£m and percent), 1999 and 2000	33
Competitive Structure	33
Table 22: Top 20 Regional Press Publishers by Number of Titles and Weekly Audited Circu―lation (000 and percent), 2001	33
Advertising and Marketing	35
Table 23: Main Media Advertising Expenditure by Selected Regional Press Titles (£000 and percent),
Year to June 2000 and 2001	35
Figure 8: Main Media Advertising Expenditure by Selected Regional Press Titles (£000 and percent),
Year to June 2000
and 2001	36
Online Ventures	37
5. An International Perspective	38
the worldwide newspaper market	38
Table 24: Corporate Ownership of Daily Newspapers in the European, North American and South Pacific Markets, 2001	38
WEEKEND EDITIONS WORLDWIDE	40
Table 25: percentage of Advertising Revenues for 7-Day Newspapers by Day of the Week ( percent), 2000	41
Figure 9: percentage of Advertising Revenues for 7-Day Newspapers by Day of the Week ( percent), 2000	41
Table 26: percentage of Advertising Revenues for Newspapers Without a Sunday Edition by Day of the Week
( percent), 2000	42
Figure 10: percentage of Advertising Revenues for Newspapers Without a Sunday Edition by Day of the Week
( percent), 2000	42
Table 27: Cost of the Saturday and Sunday Paper Relative to the Week Day Single Copy Price by Day of the Weekend
( percent), 2000	43
Figure 11: Cost of the Saturday and Sunday Paper Relative to the Week Day Single Copy Price by Day of the Weekend ( percent), 2000	43
Free-Standing Section	44
Table 28: Free-Standing Sections by Day of the Week ( percent), 2000	44
The Metro Phenomenom	45
The Rise of the Free Commuter Newspaper	45
Falling Newspaper Circulation in the us	46
UK Newspapers look to Europe for Expansion	46
International Trade Associations	47
World Association of Newspapers	47
International Newspaper Marketing Association	47
Newspaper Association of America	47
European Newspaper Publishers’ Association	48
the future	48
6. Consumer Dynamics	49
Overview	49
Table 29: Consumer Attitudes to Newspapers
( percent of respondents), July 2001	49
Summary of Main
Responses	51
Table 30: Consumer Attitudes to Newspapers
( percent of respondents), December 1998 and July 2001	51
Loyalty to Newspapers	53
Reading the Same Newspaper	53
Table 31: Loyalty to Newspapers ( percent of respondents), 2001	54
Cover Price and Promotion Factors	55
Table 32: Factors Affecting Loyalty to Newspapers
( percent of respondents),
2001	55
Frequency of Buying Newspapers	57
Daily Purchasing	57
Table 33: Daily Purchasing of Newspapers ( percent of respondents), 2001	57
Weekend and Week Day Purchasing	59
Table 34: Weekend and Week Day Purchasing of Newspapers, ( percent of respondents), 2001 59
Reasons for Reading/Buying Newspapers	61
Particular Sections	61
Table 35: Particular Section as Reason for Newspaper Purchasing ( percent of respondents), 2001	61
Opinions and
Entertainment	63
Table 36: Opinions/Views Versus Entertainment as Reasons for Newspaper Purchasing and Reading
( percent of respondents),
2001	63
TV Listings and Sports Coverage	65
Table 37: TV Listings and Sports Coverage as Reasons for Newspaper Reading ( percent of re―spondents), 2001	65
Media Preferences	67
Television and Radio News Versus Newspapers	67
Table 38: Television and Radio News Versus Newspapers
( percent of respondents), 2001	67
Attitudes to Supplements and Advertising	69
Newspaper Supplements and Sections	69
Table 39: Attitudes to Newspaper Supplements and Sections ( percent of respondents), 2001 69
Advertising	71
Table 40: Attitudes to Advertising in Newspapers
( percent of respondents),
2001	71
7. Company Profiles	73
Daily Mail & General
Trust PLC	73
Associated Newspapers	73
Table 41: Financial Results for Associated Newspapers Ltd (£000), Years Ending 27th Sep―tember 1998, 3rd October 1999 and 30th September 2000	74
Daily Mail	74
The Mail on Sunday	74
Evening Standard	74
Northcliffe Newspapers Group Ltd	75
Table 42: Financial Results for Northcliffe Newspapers Group Ltd (£000), Years Ending 27th September 1998, 3rd October 1999 and 1st October 2000	75
eastern counties newspaper group ltd	75
Table 43: Financial Results for Eastern Counties Newspaper Group Ltd (£000), Years End―ing 31st December 1998-2000	75
Financial Times Group Ltd	76
Table 44: Financial Results for Financial Times Group Ltd (£000), Years Ending 31st Decem―ber
1998-2000	76
Financial Times	77
Guardian Media
Group PLC77
Table 45: Financial Results for Guardian Media Group PLC (£000), Years Ending 29th March 1998, 28th March 1999 and 2nd April 2000	78
The Guardian	78
The Observer	78
Independent Newspapers (UK) Ltd	78
Table 46: Financial Results for Independent Newspapers (UK) Ltd (£000), Years Ending 28th December 1997, 25th December 1998 and 31st December 1999	79
The Independent	79
The Independent
on Sunday	79
Johnston Press PLC	79
Table 47: Financial Results for Johnston Press PLC (£000),
Years Ending 31st December 1999-2000	80
News international PLC	80
Table 48: Financial Results for News International PLC
(£000), Years Ending 30th June 1998-2000	81
The News of the World	81
The Sun	81
The Times	81
The Sunday Times	82
Newsquest (media
group) Ltd	82
Table 49: Financial Results for Newsquest (Media Group) Ltd (£000), Years Ending 31st De―cember 1997, 3rd January 1999 and 26th
Dec-99	82
Northern & Shell Plc	83
Table 50: Financial Results for Northern & Shell PLC (£000),
Years Ending 31st December 1997-1999	83
Daily Express	83
Sunday Express	83
Daily Star	84
Regional Independent Media Holdings Ltd	84
Table 51: Financial Results for Regional Independent Media Holdings Ltd (£000), Years Ending 31st December 1998-2000	84
Telegraph Group Ltd	85
Table 52: Financial Results for Telegraph Group Ltd (£000), Years Ending 31st December 1998-2000	85
The Daily Telegraph	85
The Sunday Telegraph	85
Trinity Mirror lc	86
Table 53: Financial Results for Trinity Mirror PLC (£000),
Years Ending 28th December 1998, 2nd January 2000 and 31st December 2000 86
The Mirror	87
Sunday Mirror	87
Sunday People	87
8. The Future	88
MARKET FORECASTS	88
Table 54: Forecast UK Newspaper Market by Revenue
by Sector (£m),
2001-2005	88
Figure 12: Forecast UK Newspaper Market by Revenue
by Sector (£m), 2001-2005	89
Research Overview	89
Additional Factors	90
9. Further Sources	92
Associations	92
Publications	92
General Sources	93
Bonnier Information Sources	94
Government and Official Sources	95
Other Sources	95
Key Note Research	96
The Key Note Range of Reports	97

EXECUTIVE SUMMARY

The newspaper market has had to change considerably in recent years as competition from other news sources — including the Internet, and cable and satellite television — has put pressure on circulations. The focus has been shifted in order to incorporate increased coverage of lifestyle issues, with many newspapers adding new sections and stand-alone supplements. Saturday editions have been a particular focus of attention, and there has also been an increase in sports coverage.

Despite these changes, revenues from copy sales have remained relatively stagnant — a trend exacerbated by the fact that price wars over the past decade have, until recently, prevented increases in cover prices. However, in 2001, a number of newspapers have introduced cover-price increases, and ever-growing newsprint costs may force others to follow suit.

Until recently, advertising revenues had been growing at a healthy rate. However, the newspaper industry, like other media sectors, has been severely affected during the past year by an overall fall in advertising expenditure. A number of national newspaper groups have reported falling advertising revenues during the same period, and have reacted with cost-cutting measures including job losses and adjustments to online activities. On the whole, the national newspaper sector has been more severely affected than local and regional newspaper groups.

The national newspaper market is in the hands of a relatively small number of players. Cross-media ownership is much in evidence, with some newspaper groups being ultimately owned by large multinational media companies, and many specialist newspaper groups diversifying into other media, such as radio. However, the past year has been characterised by an overall reduction in online activity among newspapers.

The most significant change of ownership in the past year within the national sector has been the purchase of Express Group Newspapers by Northern & Shell, publishers of celebrity magazine OK! and a number of 'top-shelf' titles.

The regional newspaper market has been subject to much consolidation during the past decade, a process which is still continuing. The need to make economies of scale has also led to title-swapping between companies — clustering titles within the same geographical area — which some commentators feel will be even more important in the future.

Among recent acquisitions within the sector have been the purchase of Southnews by Trinity Mirror, and Newscom by Newsquest's owner Gannett. Regional Independent Media (RIM), one of the few remaining independent publishers in the top ten, is currently up for sale.

The original NOP research commissioned for this report indicates that there is a strong degree of loyalty among newspaper readers. A high proportion of respondents remain loyal to the same newspaper that they were reading a year ago, and very few say that they would consider switching because of a small increase in cover price. Perhaps more surprisingly, even fewer

say that they check out other newspapers for special offers and promotions before deciding which one to buy.

Nearly three in ten respondents are regular newspaper purchasers, either buying or having a newspaper delivered every day of the week. Among less frequent purchasers, weekend newspapers have more appeal than week day ones.

On the question of the proliferation of supplements and sections in newspapers, there is a narrow majority in favour of having fewer rather than more supplements.

There is little enthusiasm for advertisements in newspapers, and a high degree of scepticism, with less than one in ten believing that `the newspaper I read would not allow products to be advertised in it if they were no good.'

The effects of the existing global turndown in advertising expenditure will undoubtedly make themselves felt in the newspaper market over the next few years. Little or no growth is expected. The September 2001 terrorist attacks in the US, whose full consequences are as yet unknown, will also undoubtedly have a negative effect on advertising revenues in the short term.

The cyclical nature of economic trends means, however, that a recovery will take place eventually. Recent consolidation and cost-cutting activities within the newspaper sector indicate that it will be in a strong position when this does happen.

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Last updated by Amanda Porteous December 2003