Monday, January 16, 2012

Under Siege: The Outlook for Print Media Is Even Worse Than We Thought, Expert Says -- But Publishers May Prosper

If you think the internet revolution has been rough on print media, wait until you see what the tablet revolution does, a paper-industry forecaster says.

As if there weren’t enough gloom and doom in the paper and printing industries these days, Roman Hohol says tablets and other digital devices will depress the demand for printed media even faster than most forecasts predict. But the director of the marketing practice for Forest Industry Consulting also sees signs that the tablet revolution will benefit many publishers.

“I believe that most [paper] industry forecasts underestimate the impact of digital media on graphic paper demand, not wanting to appear too negative to their clients,” Hohol told Dead Tree Edition. “We have developed an outlook for our clients that is quite negative.”

Hohol will present that outlook in more detail during the Industry Intelligence webcast “How the mobile media revolution will impact global graphic paper demand”, which will air at 2 p.m. EST Thursday and be available for download thereafter. Hohol gave Dead Tree Edition a sneak peek at the webcast, including the three main reasons he believes the global publication-papers industry is “under siege”:

1) The rapid adoption of tablets
The phenomenal sales growth of iPads, Kindles, Nooks, and other e-reading devices is already dampening demand for print media, he says.

“Because tablets are so new, the data on usage are spotty,” he says. But studies are already finding a measurable shift in consumer behavior away from print media and toward tablet versions, he adds.

“Print newspapers are the most affected media, followed by books and magazines.”

(Note this comment last week from Angela Bole of the Book Industry Study: “Consumers who migrate to digital are spending less on physical hardcover and paperback books.”)

2) Digital substitution in the developing world
The usual assumption has been that rising affluence and literacy in developing countries would mean growing demand for print media for some years in those countries before digital media ruin the party. That’s why so many huge coated-freesheet paper machines are coming on line in China.

But Hohol already sees signs of trouble for print media in China and India.

“Newspaper and magazine circulation is still growing in those countries (Brazil and Indonesia as well), but digital media growth is much faster.” He thinks newsprint consumption in China may already be near its peak.

3) A new business model for publishers
“Tablet users appear more willing to pay for content than do web browsers,” Hohol says. That is making publishers more enthusiastic about abandoning print than when the only alternative to print was the web.

(Similarly, Boles is optimistic about book publishers' prospects because her organization found that consumers who have transitioned to e-books are spending more than before on books in all formats. “Assuming the publishing industry can develop the right business models, this is good news,” she said.)

“As readers shift from print to digital forms,” Hohol said, “publishers will find the cost of producing print prohibitive (many of the executives I speak to would love to do away with the cost of paper, ink, printing and distribution) and therefore will have to recoup the costs of producing print from the readers. Does this mean that a woman will have to pay $50 for the September issue of a print Vogue? Maybe.”

Responding to a recent prediction about the outlook for newspapers in five years, he says, “I do not agree that there will be only five daily newspapers in the U.S. but do think that many large dailies will forego print editions and focus exclusively on digital delivery.”

“Print media is not going to disappear in the coming decade; but it will become less relevant and more expensive.”

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7 comments:

Anonymous said...

Is anyone not surprised by this?

Anonymous said...

Couldn't disagree more. With digital printing, print is transforming to become more relevant with personalization and mass customization. Yes, print volumes are declining but with utilization of customer data it certainly will become essential to print direct marketing to customers with targeted messaging. Customers will want delivery of more relevant content for them.

Anonymous said...

People will want delivery of more relevant content, but in a digital format. The people that do this will be okay but those dealing with physical content delivery via the USPS have better wake-up to how things are changing in the world.

Manish said...

Print will never die, though it will shrink to publications that warrant the expense.

Tablets are a great thing and publishers will prosper. My company, for example, has a product "The iPad Publisher" which levels the playing field so any small, independent, or self-publisher can have the same global mobile distribution reach as Time Warner, Hearst, and all the mega publishers.

How is that not a good thing? Today anyone can get their own App and reach 50+ million devices worldwide. Literally even a startup can get that level of exposure and reach, which is impossible to achieve through traditional print.

What you'll see is more niche publications that reach a wide audience because technology enables it.

Manish
http://www.nov8rix.com/ipad-publisher/

Anonymous said...

surveys by many different sources state otherwise (state your facts and sources -- not opinion): DMA, InfoTrends, Caslon, Forrester all point to preference from all age groups still like communications in printed forms. Don't get me wrong, I own an iPad2 and love it, but I still get specialty magazines and some news in printed formats. And by the way, even digital publishers are now finding the frequency and repeat purchase of digitally published content (i.e., books) are not living up to market forecasts. And when it comes to direct marketing, the tactile printed piece that has a QR code or pURL which is RELAVENT, timely and engaging it sends me to a website to purchase. Its not a the website or digital device that got me to engage.

Anonymous said...

The futures for print will be in packaging and wide format digital for POP & POS. It's sad that reader content is quickly moving to tablet and other digital media. As a matter of fact I'm reading and responding to this from my smart phone.

Gary Lesperance said...

Isn't it ironic that we went from stone tablet to print on various media and now back to tablets again?