Crisis in the Spanish Newspaper Industry

Decline of Newspapers in Spain

A Crisis on Spanish Newspaper Article

The first five months of the year have been very bad for the traditional newspapers. Even worse than expected. The impressions collected among the editors of the sector reflect that the feelings are very negative and that the prospects for what is left of 2017 are not better. The main problem is that the digital advertising of traditional newspapers is suffering from significant signs of exhaustion and that, for the first time, it threatens to stop sustaining dwindling paper revenues.

“The situation is very bad.” It is the generalized conclusion of the publishers when being consulted about the health of the sector during this 2017. The last quarter of last year was already negative and although the most optimistic expected that this course the situation improved, the data have returned to turn away to The newspapers. And for the first time digital revenues also do. A true perfect storm that all editors have detected , that can no longer be explained with traditional arguments and no one knows how to fight.

The justification for the economic crisis, which for years has explained the collapse, has been discarded in recent months. “GDP is growing at a good pace, which means that companies have money, but they are no longer targeting traditional advertising investments,” says a newspaper editor in Madrid. In 2016 Spanish GDP grew by 3.2% and consumption did in similar figures, but investment in traditional media advertising grew by only 2.8%, according to Infoadex , with a 6.3% collapse for the press .

Political instability was the latest newspaper argument to justify declining advertising investment. The lack of government during 2016 would have frozen the investments of the companies , moving away the marks of the more traditional supports. However, the bad start of this year overthrows this theory, since with a government operating for seven months the figures have not gone up.

During the first quarter advertising investment in the press – which only measures print editions – fell by 5.6% according to Infoadex , with a media sector growing at 3.3%. In all of AEDE ‘s seventy newspapers – renamed AMI a few weeks ago – paper advertising revenues fell by 5% and digital revenues improved by 12%.

The high weight of paper in this income has generated that, in the majority of the headings, especially the smaller ones, the total amount was inferior to the first three months of 2016. “The digital revenues do not grow at the rate that We were expecting, “says an editor of another of the Spanish newspapers with the largest circulation.

The Decline in Newspaper Sales: the Sales of Major Newspapers in Spain Fell 19%

But the problem is not just advertising revenue. The sangria of the specimens continues. The data from OJD reflect that in the main headlines continues to fall the diffusion and sales. So far this year, the six main newspapers – El País, El Mundo, ABC, La Razón, El Periódico and La Vanguardia – have reduced their circulation by 14% and their sales by 19%. Billing revenue

This explosive cocktail has been responsible for the fact that in the first quarter the three main press groups, Vocento, Prisa and Unidad Editorial , have reduced their overall income by 6.5%, despite the growth of digital campaigns in their budgets . Vocento – ABC, El Diario Vasco and El Correo – reduced its turnover by 6.3%; Prisa – El País, AS and Cinco Días – lost 12% and Editorial Unit – El Mundo, Marca y Expansión – fell 3.3%. The first two closed their press business units with net operating losses.

A debacle that transcends the first quarter and threatens to spread the rest of the year. Arce Media’s internal data indicate that the sector fell 7% during the month of April and press executives point out that a similar debacle is expected during May. “The most worrying thing is that companies are learning to live without investing in our means,” says an editor to EL ESPAÑOL, which means that revenues that are being stopped are probably no longer recovering.

This contraction is occurring especially in the digital editions of the traditional headers, where the advertising revenue – the only ones that are obtained by this way – grow much less than expected. Even some publisher with diaries with a strong digital weight, recognizes that they could be touching its ceiling with a smaller growth margin.

The data show that in the first three months of the year the digital revenues of some newspapers grow much more discreetly. Headers like El País improve only 8% and others like La Voz de Galicia or El Correo increase by a discreet 6%. The case of the newspaper Prisa is revealing since during this first quarter has achieved the point of balance between digital and printed advertising revenues. This means that every point they lose on paper – until March they left 20% – must be recovered by the digital, not avoid the collapse of joint income. A year ago, the digital growth of El País was 20%.

Reasons for the Decline of Newspapers: Facebook and Google monopolize digital revenues

Where has the digital billing gone? Publishers detect a dangerous migration of digital advertisers to other platforms like Facebook and Google . In 2016 more than 70% of the Internet advertising investments went to these two companies. “Advertisers prefer the volume that social networks give and set aside the value of brands,” they comment.

The statistics of traditional newspapers reflect that this behavior of advertisers is in the line of news consumption. The covers of the digital versions of the traditional newspapers lose more and more weight in front of the traffic generated in Facebook and the rebound rates show that the new users of digital media do not look for headings but news. The worst of all this scenario is that, according to the editors themselves to EL ESPAÑOL, the answers do not exist and there is little that can be done to try to turn this migration of advertisers around .

This situation threatens the newspapers with deepening an endemic crisis. Traditional headers have been adapting for a decade to provide digital responses to the problems of the paper press. They have built equipment for the new environment, have replaced the template and have adapted their products in order to assault the new digital environment. In spite of this, the new players of the sector are robbing the portfolio to them.

What to do? The sources consulted indicate that the immediate solution is to continue adjusting operating costs and not just in the printed business. They recognize that the structures are already set to the minimum and that it is almost impossible to continue making cuts. The succession of redundancies that have affected the sector have ended by amortizing the fall of the paper, so it is necessary to look for new solutions to try to meet budgets in an increasingly the negative billing environment.

Vocento executed about thirty dismissals at the beginning of the year on ABC, ABC Sevilla and its corporate department, while El País has announced another twenty exits throughout this year. Editorial Unit , with four EREs behind it, has continued to adjust budgets and cut costs, although no longer with staff cuts. The Zeta group, which currently renegotiates its debt to the banks and the obligation to cut costs urgently, will adjust. The company is not officially committed to maintaining employment.

Future of Newspaper Industry: Mergers as a definitive solution

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