NEWS | 28 Oct 2016

Norway and Sweden: Savings keep newspapers in the black

The newspaper industry is under pressure. Advertising revenues continue to fall, and the continued profitability of most newspapers is explained by substantial cost cuts. At the same time, business is going relatively well for TV and radio. This is shown in two reports on media economy by the Norwegian and Swedish media authorities.

The Norwegian Media Authority and the Swedish Press and Broadcasting Authority have each published an analysis of the domestic media economy in 2015. The reports analyse the development of newspapers, television and radio, looking at turnover and profitability at the industry level as well as for individual companies.

Major cost cuts keep figures in black
The daily press is the sector most affected by the digital competition in the media market. In 2015, newspapers’ total turnover declined in both Norway and Sweden (6 and 3 per cent)*, and substantial cutbacks are behind the fact that most newspaper operations still report a profit.

Even though both circulation and advertising revenue are on the decline, it is advertising that accounts for the largest fall; and it is especially print advertising that is plummeting. In 2015 Norwegian newspapers’ print ad revenue decreased by 83 million Euro, and that of Swedish newspapers decreased by 69 million Euro.

Digital no compensation for print loss
While newspapers’ digital advertising is growing, it cannot compensate for the decline in print. In Norway revenue from digital advertising was up by just 1 per cent from 2014 (2 million Euro), and it was only slightly better in Sweden , with an increase of 11 per cent (19 million Euro).

There are major differences between various newspaper categories, however. For the tabloids – the two newspapers sold in single copy in each country – the digital economy is particularly important. In both Norway and Sweden, around 70 per cent of the advertising revenue of the tabloid press is derived from digital channels. A Swedish comparative example is Mittmedia, a local newspaper group that has invested heavily in digital sales, which in 2015 had a digital advertising share of 16 per cent.

At the same time, reader payment for content is becoming increasingly important, even though the revenue is shrinking in monetary value. In Norway, where in 2015 the circulation revenues fell by nearly 2 per cent and advertising revenues by almost 11 per cent, for the first time income from circulation was greater than that from ads (49.4 per cent vs. 46.5 per cent).

Radio and TV in the black
In 2015 commercial radio strengthened its profitability in both countries, and advertising sales increased. For the TV industry, advertising increased slightly in Norway but declined in Sweden. The commercial TV industry, which consists of a few dominant players in each country, is profitable, but is facing challenges like intensifying competition from global streaming services and escalating prices for broadcasting rights, particularly sports.

* Newspapers' total turnover in 2015: Norway 1.422 million Euro; Sweden 1.801 million Euro.

 

About the reports

Økonomi i norske medievirksomheter 2011-2015 [Economy in Norwegian media operations 2011-2015] is the Norwegian Media Authority’s annual report on the media industry's economic development, with a focus on news and current affairs media. Data are primarily based on the Authority’s own data collections plus Norwegian media companies’ official annual accounts and reports. The report is published in Norwegian. Read more and download

 

Medieekonomi 2016 , written by Jonas Ohlsson PhD from NORDICOM, is part of the report series Medieutveckling [Media Development] published by the Swedish Press and Broadcasting Authority. Data are primarily based on Swedish media companies’ official annual accounts and reports. The report will be published on an annual basis. The report is available in Swedish. Read more and download

 

BY: EVA HARRIE