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Rough times ahead for print ads, says PwC

Thursday, 08 June 2017
By Jake Nelson

PwC forecasts an $850 million drop in newspaper ad revenue by the year 2021.

PricewaterhouseCoopers (PwC) has forecast massive drops in print advertising over the next four years, with newspapers set to lose approximately $850 million in ad revenue by the year 2021.

In its 16th annual Australian Entertainment & Media Outlook, the professional services firm found that though circulation for newspapers would increase by 1.7 percent from 2016 to 2021, to a total of about $1.4 billion, this would not offset the precipitous drop in advertising revenues.

Megan Brownlow, PwC

Megan Brownlow, entertainment and media industry leader at PwC, said traditional media companies must become ‘frenemies’ if they are to grow. “Across Australia’s media and entertainment industry we continue to see a strong divergence in traditional and digital media spend. The story has been the same for a number of years now. Instead of entrenching the dichotomy between traditional and digital players, this trend is forcing companies to take a different approach and has led to blurring of business functions, business models and of industries,” Brownlow said.

According to Brownlow, competitors are becoming potential new clients or partners, while key suppliers are becoming competitors elsewhere in the value chain. “Old-school thinking will need to change as collaborating with rivals becomes the norm. Negotiation is cheaper and more effective than combat. The way to grow in this environment is to identify gaps in the customer experience and collaborate or partner with a competitor or technology provider to address this gap,” she said.

The total market for consumer magazines is expected to fall by about $380 million over the same period, with print advertising and circulation revenues both expected to decline. Out-of-home, meanwhile, remains the fastest growing of the traditional advertising media, and is expected to grow by more than $300 million by 2021 – though this growth will be largely in the digital sector, with physical out-of-home revenue set to decline by just under $130 million.

Graphs from PwC’s ‘Australian Entertainment & Media Outlook 2017-2021’.

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