Continued decrease in advertising revenues, but increased media consumption, growing consumer revenues and a doubled press and media support. In addition, the media companies reduced their costs. This sums up the Swedish media year 2021, according to the new report Medieutveckling 2021: Medieekonomi [Media Development 2021: Media Economy].
The report shows that the corona pandemic, together with the ongoing structural change in the media market for several years, reinforced some existing trends while breaking others. The report is written by Nordicom on behalf of the Swedish Press and Broadcasting Authority, and it has been published annually since the mid-1970s.
Increased interest in news
The pandemic created a need for information among the public about, among other things, the spread of the virus and the countermeasures that society introduced. A number of studies, such as Nordicom's media habits survey Mediebarometern [The Media Barometer], have shown that the general public increased their media consumption during the year – and that they turned primarily to professional news media and secondarily to social networking sites for news.
Strengthened profitability of the daily press
The Corona pandemic meant that advertising investments in the media declined sharply in 2020. For the Swedish news media, advertising revenues in 2020 amounted to SEK 4.8 billion, which was a decrease of about 21 per cent compared with 2019. The declining advertising investments can largely be explained by the ongoing digitalisation of society and the restrictions introduced to curb the spread of infection.
In the morning press, the loss of advertising revenues was partly offset by increasing audience revenues, which increased by 2 per cent to SEK 5.8 billion. For the evening press, on the other hand, it was a reduction of audience revenues by 4 per cent to SEK 1.5 billion. One of the prominent reasons for the increase in consumer-related revenues in many news agents was the rising media consumption.
In total, revenues from the total daily press – including government support – decreased in 2020, compared with 2019. Revenues decreased by just over 1 per cent to approximately SEK 13.7 billion. The companies met the declining operating income by reducing costs. The latter decreased by just under 3 per cent to approximately SEK 13.8 billion. The daily press's total operating profit landed at SEK -50 million, which was an improvement compared with the previous year's profit of SEK -221 million. The improved result can be explained, among other things, by the fact that the companies have reduced their costs, increased their audience revenues and increased media support.
Another way to study the profitability of the daily press is to read their gross margin in the median. In the daily newspapers published three to seven days a week, this margin improved from -1.2 per cent in 2019 to +5.0 per cent in 2020. Operational support and other forms of support are also included in this way of measuring profitability.
Reduced turnover for broadcast media
Advertising investments in broadcast media also shrank in 2020. Investments in broadcast television decreased by 16 per cent to SEK 4.9 billion. The media group Nent Group's sales also fell by 16 per cent to SEK 12.0 billion. Nent is the company behind TV3, TV6 and Viaplay, among others. TV4's turnover also decreased. The channel's sales fell by 14 per cent. Discovery Network's sales in Channel 5, Eurosport and other services fell by 12 per cent.
Radio lost 9 per cent of advertising revenue in 2020, compared with the previous year. The decline led to a decrease in sales for Nent's radio companies and Bauer Media, the two largest commercial players, by approximately 18 and 12 per cent, respectively.
Continued digital advertising growth – a growing share to the tech giants
But at the same time as advertising investment fell for traditional and publicist media, digital advertising products continued to develop strongly. Advertising investments in the Internet rose by 6 per cent. The advertising market as a whole shrank by just over 5 per cent to approximately SEK 39 billion in 2020.
The pandemic year also reinforced the trend where a growing proportion of advertising investments have left Nordic media in favour of large and US-owned platforms, such as Facebook and Google.
- Download the report Medieutveckling 2021: Medieekonomi (in Swedish)
- Read the press release from the Swedish Press and Broadcasting Authority (in Swedish)