How the publishing world is evolving

August 21, 2015

Global research house Ovum has put together a digital consumer publishing report on where the industry will be heading in 2020. Nick Thomas, practice leader in digital media at Ovum says the company spoke to consumers about how they consume media, at Business Connexion’s head office in Midrand recently.

Thomas explained that digital media would be anything delivered digitally, which includes over-the-top (OTT) video, music, gaming, digital advertising and digital consumer publishing. He also mentioned that the transitioning of ebooks, newspapers and magazines had been more successful; and revenue will grow to US$74bn in 2019, up from US$41bn in 2015.


Print vs digital

The global consumer publishing revenue in 2015 is split at 86% print and 14% digital; and by 2020, this is expected to shift to 75% print and 25% digital.

“Print is still significantly dominating advertising and consumer spend,” says Thomas. While there is a transition, physical media is still important, such as printed books, magazines and newspapers, he adds.

“It’s very easy to copy music files and it’s very easy to copy a movie and put it online. Nobody has time to do that with books. Ebooks made it easier in the last couple of years.”


Most valuable media

Thomas says they asked consumers which media is most valuable to them – TV, music, newspaper, books, etc. “In 2015, the media type with the most following was books.”

Consumers like reading, across all 15 countries surveyed. “Do not underestimate the appeal of books, people still pay for books, which is strange in the digital universe.” The shift was quite easy and is happening quickly, he says.

“In printed media, there is no one type of market. Everyone has moved to digital; and we see a reasonable growth in digital.” Overall, is it the digital space that is growing.


Global revenue by 2020

“Global consumer revenues will reach $304bn by 2020. Revenues will grow because of the successful transition to digital.”

“The real challenge in digital is getting consumers to pay,” says Thomas. Digital versions of magazines are not compelling enough to buy, as physical ones still give consumers ‘something to hold’, he adds.

Even though there are millions of free news websites, print revenue will continue to dominate the publishing market globally; people love print therefore digital advertising will continue to grow.


South African context

“In a South African context, penetration of digital is less, with 3.3% representing digital revenue,” says Thomas. The general takeaway from South Africa is that revenue from consumer newspapers and magazines will rise and there are many reasons why it’s growing, such as challenges within the economy – macro economic factors affect it; consumer books are plateauing.


Future consumer trends

Thomas says publishers will start exploring multiple business models like working with telcos, OTT videos and service providers. “Publishers will partner with social platforms to increase audience; and publishers will use mobile to drive greater growth in both mature and emerging markets.”

An example of this, he says, is publishing directly from Facebook, which is dominant in every market – with revenue share; including Snapchat for younger audiences. “For publishers, it’s about how your products works on mobile devices; it’s mobile first,” he says.

Other trends are that digital rivals will provide strong competition, says Thomas; and publishers need to embrace threats from new rivals. He cites Buzzfeed as an example. “It’s dangerous not to take them as a success”.
Buzzfeed is good at creating content and some stories have broken on Buzzfeed, yet they don’t have a print product; it’s digital only. “There are always new competitors who will challenge you”.

Another example is Twitter’s “Project Lightning”; they will be launching news based on topics and events.

“By 2020, the global consumer publishing market will be worth US$304bn, including magazines, books and newspapers. Print will remain the format of choice for consumers,” concludes Thomas.

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