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Newspapers' spiral to continue

NZ NewswireNZ Newswire 7/06/2016

The report says newspapers are in a "pronounced and persistent contraction". © Bloomberg The report says newspapers are in a "pronounced and persistent contraction". Worst business idea for down the track? A newsagents renting out videos.

That's probably widely known but is backed up by figures from PwC's Global Entertainment and Media Outlook, which predicts the biggest growth in media between now and 2020 will be internet advertising.

Television, video games, books, magazines, music and cinema are all expected to grow.

Last year, for the first time, more people were going to the internet at breakfast than reading newspapers.

"New Zealanders are continuing to turn away from print in favour of digital alternatives," says PwC partner Keren Blakey.

The changes were unprecedented and she cited the proposed Fairfax/NZME merger as how they were changing the landscape.

The report says newspapers are in a "pronounced and persistent contraction".

The 619,000 copies of papers being printed in 2011 will drop to 321,000 in 2020. Advertising revenue, $410 million in 2015, may drop to $243m.

However, internet advertising - worth $338m in 2015 - is expected to grow 13.8 per cent each year to be worth $1.6 billion in 2020.

More than half, 55 per cent, of internet advertising revenue is from paid search, which should reach nearly $900m by 2020. Google has 90 per cent of the search market.

PwC predict publishers will increase the price of papers and also try to get people paying for online content to offset the loss in circulation.

"But the disappearance of readers from print is having a big impact. Newspapers' reach has shrunk to one-third of adults, most of them in an older demographic."

However, for radio PwC believes the story is better.

The industry's advertising revenue of $282m is only predicted to fall fractionally by 2020.

Radio networks were embracing digital and advances in measuring their audiences meant advertisers, receiving more accurate information about consumers, would be more inclined to spend money on radio advertising.


* Newspapers' overall revenue: $733m in 2015, down to $585m in 2020

* Home video rentals: drops from $263m to $200m

* Television and video: rises from $1.1b to $1.3b

* Video games: revenue is predicted to hit $240m

* Book publishing revenue: 4.7 per cent annual growth to $557m

* Magazines revenue: grows from $492m to $511m.

* Cinema's box office revenue: $199m, grows to $220m

* The music market: grows from $205m to $223m.

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