2019 Publishing Year in Review

An FTI Consulting Report

Telecom, Media & Technology (TMT) | Corporate Finance & Restructuring

December 12, 2019

Checklists

As we approach the end of 2019, our thoughts turn to the changes we saw this year and the lessons we learned from them. As is our practice, we want to share those lessons we learned with you, our clients, industry colleagues and friends.

Three issues stand out:

  • What does a sustainable business model look like? Is the subscription-based model for everyone?
  • When is the right time to convert to substantially digital or digital-only?
  • As each company’s approach and timing may differ, newspapers, magazines and digital natives might adopt different business models overtime.

The Right Time to Convert to Digital

The answer to these questions is situation-specific; there’s no one-size-fits-all approach. To the extent that print is generating substantial cash flows for the business, it is important to nurture those cash flows as well as reinvesting the cash flow to support digital migration. The volume and speed that the print cash flow is declining will determine the right time to convert to digital. FTI Consulting’s forecast, powered by eMarketer and Magna Global, shows newspaper print advertising declining in double digits, and tapering off in 2023 to 8.0% of revenues and 50% of volumes in 2019.

Magazine print advertising is also expected to continue to decline in double digits, with total revenues in 2023 equaling only 65% of the level in 2019.1

The core question remains: is there a sustainable digital model? FTI Consulting models indicate yes; it will be in place sooner for some, later for others. Our views and analysis show that most newspapers and many magazines will be predominately digital within the next five years. Some within two to three years. We estimate that digital advertising’s double-digit growth will moderate into high single digits beginning in 2022, and the large platform companies will continue with an out-sized share of the growth.

Footnotes:

1: FTI Consulting Data, we relied upon several data sources throughout for consistency in comparing estimates and figures over time, 2019.


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