It may sound like old news that print publishers are losing advertising revenue to digital publications, and are forced to shift their business models toward becoming more online-focused, but new data shows that trend is alive, well and picking up speed.
Canadian periodical publishers generated $982.8 million in operating revenue in 2021, according to data Statistics Canada released today. That is down 16.4 per cent from the more than $1.17 billion that those publishers generated in 2019, and is the lowest amount since comparable data started to be collected in 2013, according to the nation's number cruncher.
Statistics Canada's data is for every other year. In the two-year period between 2017 and 2019, Canadian publishers' operating revenue fell nearly 10.6 per cent from more than $1.31 billion.
The effects of the COVID-19 pandemic likely played a role as consumers tended to spend more time at home and less time at stores where they could buy periodicals. Paper costs increased, causing even more hardship for print publishers.
Consumers' increasing preference to read news online has also meant that the print-periodical industry struggled to attract advertising dollars.
Advertisers were also able to invest marketing dollars in social media websites and digital advertising that appeared on a range of websites or in search results. Some estimates pin the proportion of digital advertising spending that Google and Facebook reap at around 80 per cent.
In an effort to shatter that dominance, the U.S. Justice Department this morning said that it was seeking to break up Google's business of brokering digital advertising across much of the internet. It today filed a lawsuit against Google parent Alphabet Inc. (Nasdaq:GOOG), which followed previous lawsuits that allege Google abuses its role as a dominant broker of online advertising.
Indeed, the largest decline in print periodicals' revenues in 2021 was in advertising sales, which fell by $146.6 million from 2019, Statistics Canada said. Likewise, circulation sales revenues continued to decrease, falling $32.0 million from 2019, it added.
Publications continue to morph into being bigger digital entities by offering online subscriptions and digital editions of print newspapers and magazines. This trend meant that digital advertising in these publications increased by $7.6 million in 2021, compared with 2019, Statistics Canada said. Digital advertising rates, however, are low, making it more challenging for news organizations to sustain operations at levels seen when print advertising was dominant.
In that same time 2019-2021 period, periodical publishers' circulation revenue – much of it online – increased by $5.9 million, Statistics Canada said.
Online-only publications have been on the rise. The share of all periodicals that Statistics Canada included in its analysis that were digital-only titles increased to 11.1 per cent, up from 9.5 per cent in 2019.
Another trend is in the decline of free, or promotional copies of publications.
"This trend was further impacted by the pandemic, during which areas with high foot traffic, such as corner stores and malls, were affected by restrictions," Statistics Canada said.
"The share of other free, complimentary or promotional copies among total circulation declined 4.7 percentage points in 2021 from 2019."
Some good news is that many publications are profitable.
In 2021, operating expenses declined by $199.9 million from 2019, resulting in a higher profit margin of 9.3 per cent, Statistics Canada said.
Salaries, wages, commissions and benefits fell $54.5 million over the same period.
