Advertisers and consumers are increasingly attracted by online and digital products, and this is creating major structural changes in the media market.
Publishers increasingly see new technologies not as a threat but as an opportunity to expand their own activities to “reach readers in different ways and provide new services to advertisers,” according to media agency ZenithOptimedia, which prepared the World Magazine Trends 2010–2011 report for the International Federation of the Periodical Press (FIPP). Publishers increasingly see new technologies not as a threat but as an opportunity
The launch of Apple’s iPad and similar electronic tablet devices that can display magazine-style content has sparked a great deal of interest among publishers in 2010.
Czech publishers are in the same situation as their peers worldwide and are looking for lucrative ways to address the growing number of new devices and their users in the long term.
“The fear is gone. Now publishers need to figure out how to come up with relevant applications on a market where access to the iPad and new [electronic] tablets isn’t so large yet,” said Jan Pochman, coordinator of media services with the Czech Publishers Association (ÚV). Some domestic publishers are already making preparations. “There are investments being made into new applications. This will be a certain trend in the years to come,” he said.
Worst year ever
Optimism for presenting content on new devices comes on the heels of pessimistic results that make rapid expansion into new areas a bit difficult.
“The development of new products requires investment at a time when many publishers have to cut costs and, for the moment, most are not yet earning significant revenue from their digital products,” the FIPP report states.
2009 was “the most painful year” in modern times for the global advertising industry. Overall ad expenditures shrank by 10.6 percent, much more than the 2.4 percent decline in the nominal GDP of countries covered in the report.
For the 20 years that ZenithOptimedia has collected worldwide data on ad expenditure, the previous worst year was 2001 when ad expenditure shrank by 3.7 percent. Even though plummeting ad revenues hit the entire industry, magazine publishers were worst-off.
The periodical ad market suffered a 20.2 percent drop in expenditure in 2009, caused mainly by a shift in spending by luxury brands, which are an important component of magazine advertising. These luxury brands sharply cut their expenditure, anticipating a shift in consumer spending from luxuries to essentials, the report notes.
On top of that, many magazines are luxuries in their own right, and cash-strapped readers reduced their spending on magazines in favor of cheaper media. These trends were aggravated by the long-term migration of advertising from print to the Internet, which has been eroding magazines’ share of ad expenditure since 2000, ZenithOptimedia observed.