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for print's future
U.K. study: New technologies already eating away
By Jeff Bercovici
Magazine and newspaper publishers are fond of saying that their products don't compete for consumers' dollars with newer technologies like the internet and digital cable. Rather, they complement each other, with each offering something unique and irreplaceable.
That's nice to hear. It's also false.
In fact, the rising popularity of new forms of media and entertainment is directly cutting into the demand for traditional ones.
And it's only going to get worse, a lot worse, says a new report released this week by media analysts Screen Digest and banking group ABN Amro.
"The traditional media are being cannibalized, very much so," says Elizabeth Phillipson, the study’s author.
The report, titled "U.K. Mediaphile 2010," looks at trends in the U.K. media market going all the way back to 1985 and projects how those trends will play out over the next eight years.
While the U.S. market isn't a perfect reflection of the one in the U.K., they’re similar enough that most of the report's broad conclusions apply to this country as well.
Where there are differences, they lie mostly in the adoption curve of certain technologies.
For instance, mobile phone use is far more pervasive in the U.K., while adoption of video-on-demand is further along in America.
Also, most U.S. print readers get their publications by subscription, while in the U.K. most publications are purchased at newsstands. Too, U.S. publication derive a far larger share of revenue from advertising, which reduced the cost to consumers, whereas British publications are more dependent on circulation revenue.
Nonetheless, , says Phillipson, the pattern of new and electronic media supplanting older, print-based media is definitely a transatlantic one.
In 1985, according to her analysis, real consumer spending in Britain on print media was about 3.37 billion pounds, accounting for just over 48 percent of the total market.
By 2000 print media spending had grown to 6.94 billion pounds, but its market share had dropped to 20 percent.
By 2010 its share will have fallen to just 15.8 percent, according to the projections in "U.K. Mediaphile 2010."
It's not hard to see where all the vanishing dollars are going: to subscription media, defined in the report as cable and satellite TV, the internet and mobile telephony.
Subscription media's market share rose from 11 percent in 1985 to 45 percent in 2000, and it will hit 50.9 percent by 2010.
Historically, Britons have been more avid consumers of newspapers and books than Americans, making their abandonment of print media over the last decade and a half that much more dramatic.
But Phillipson, whose next study will look at consumer trends in the U.S. media market, says she believes that Americans' loose attachment to the printed word may make them even more eager to redirect their dollars to electronic, subscription-based media.
Another difference between American and British consumers is that the latter spend a higher proportion of their disposable income on media and entertainment--considerably higher, in fact.
"People here basically go to work, go home, watch satellite TV, play with their mobile phones or rent a video, and that's their life," says Phillipson, who is Canadian and has lived in Los Angeles.
Growth in media spending by British consumers has outpaced growth in household income over recent years and will continue to do so until 2003, when factors such as the saturation of the mobile phone and pay TV markets will cause it to slow down.
In 1985 an average of 3.5 percent of total household expenditures went towards media.
By 2000 that proportion had risen to 6.7 percent, and it is forecasted to reach 7.5 percent in 2003.
"My firm belief after doing this report is that the extra media spending is coming from what consumers once considered household essentials," such as clothing, food and travel costs, says Phillipson.
"They’re giving up those extra bits and pieces to have that pay television subscription or that mobile phone every month."
Even lower income households in the U.K. are likely to have a satellite dish, a mobile phone, an internet connection and a DVD player, although that often means taking on an unhealthy amount of debt, she says.
In her next report, which will be ready sometime this summer, she expects to find that U.S. mediaphiles are a somewhat more sensible lot in this regard.
"Where the U.K. consumer is willing to go without what were once essentials in the household, I don't think Americans are."
February 15, 2002 © 2002 Media Life
-Jeff
Bercovici is a staff writer for
Media Life.
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