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30.12.2019

No. 454: Developments in the market for newspapers and periodicals

No. 454: Developments in the market for newspapers and periodicals (December 2019)

Authors: Fabian Eltges, Petra Junk

(full version only available in German)

Summary

Online publication of news and changing reading habits have led to a massive decline of printed newspapers and periodicals. At the same time, many traditional publishers of daily and weekly newspapers offer their content as ePapers or eMagazines. Magazines for clubs and customers are equally facing declines in printed volumes. In addition to changing habits of media consumption, traditional publishers are challenged by eroding revenues from advertising and increasing cost of paper. These developments in publishing markets affect volumes for physical deliveries, and thus the market for delivery services in Germany.

The study offers data on sold and printed volumes for different segments of the publishing industry in German, and analyses the effect on delivery markets in Germany. It investigates future expectations of news publishers, and analyses current challenges for the sector, including digitisation, changing media habits, declining advertising revenues, and increasing prices for printing paper. The study presents a forecast of future volumes, and outlines strategies of publishers to cope with digitisation.

For the delivery markets, the study describes the logistical process for press subscriptions and the roles of different market players, and discusses current challenges from volume declines and increasing input costs. It presents future expectations of market players, and discusses the implications for the delivery market in Germany.

For periodicals, the study concludes that publishers do not currently have any economic alternative to postal delivery by Deutsche Post AG. This monopoly situation is expected to persist in the foreseeable future. Conversely, delivery of (daily) newspapers is dominated by local delivery companies specialised ion early morning delivery, often owned by local publishers. Since postal operators cannot facilitate early morning delivery, they struggle to offer attractive deliveries to newspaper publishers.

In the near term, newspaper publishers and their delivery organisations will benefit from a targeted subsidy introduced by the German federal government in autumn 2019. In the longer term, however, further volume declines and increasing labour cost will mean increasing cost of delivery for publishers. Further consolidation in the media industry appears as a likely consequence. In this perspective, newspaper publishers are in need of new business models and/or regular subsidies from government.

Discussion Paper (in German language) is available as pdf-file and can be ordered for a fee of 7 Euro incl. VAT.

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