Distripress, the international press association, commissioned Wessenden Marketing to undertake a review of global press trends and of the key issues facing supply chains around the world - The Distripress Circulation Monitor (DCM). Jim Bilton summarises the key findings.
The conclusion of last year’s DCM was that it was time for the industry to manage the undoubted turbulence in the market more creatively rather than to be resigned to terminal decline. While the slide in print copy retail sales continues, this year’s report charts a subtle, but real change in attitude. The environment remains challenging and, if anything, more volatile and erratic from country to country. Yet what is changing is the determination of a number of companies involved in cross-border distribution to think more laterally and creatively in order to reshape their businesses. Moving from Denial to Despair to Determination is a recurring pattern in press supply chains around the world. Tracking that movement is at the core of the DCM:
* Cross-border print distribution is still a significant business.
It accounts for an estimated 6% of global press sales. Print retail sales account for 73% of cross-border sales volumes, print subscriptions for 20% and digital for a small, but growing 7%.
* A slowdown in the rate of fall.
For newspapers, the global picture (excluding the rampant China and India who totally distort the figures) was -2.7% in volume in 2014 compared with -4.2% in the previous year. For magazines, the slowdown was more modest: from -4.6% in 2013 to -4.3% in 2014.
* The sense of free-fall is lessening.
While all the key indicators continue to trend downwards, more companies are reporting steadiness in areas such as business performance, business confidence, promotional budgets and the economic environment in which they are operating.
* The mood is shifting from denial and despair to determination.
A few operations are still in denial, running their businesses in much the same way as in the past in the hope that things will improve. Some are despairing of there being a future business at all and are focused on endless cost-cutting. Others are determined to find new ways to ride the flow of change. The growth companies are being driven by focusing on higher priced niche print products and by diversification into non-press products and services, including digital.
* With determination comes a more challenging and questioning attitude.
Each link in the chain and every process are coming under the microscope in terms of whether real value is being added. The consolidation of competitors is clearly a growing issue. Also, new partnerships and alliances - even between old competitors - are being forged in order to drive scale economies and open up new opportunities. Yet this questioning attitude is also resulting in more blunt discussion and friction in the supply chain. It is also revealing that the issues facing individual countries are increasingly similar and global and that more cross-border sharing of experiences would be beneficial.
* Domestic market issues coming more to the fore.
The rate of change is clearly speeding up and the changes themselves are becoming more radical. Yet a significant change in this year’s DCM is the tone of the comments and the fact that the different links in the chain are being more openly critical of each other as the pressures build. On one hand, publishers clearly feel that the “middlemen” are not delivering in areas such as smart marketing activity, the usage of data to provide better copy allocations and simple attention to detail. On the other hand, the middlemen feel starved of copy and promotional support and they question the level of publisher commitment to the retail channel in comparison to digital or postal subscriptions.
The 2015 DCM maps a world where the pace of change is accelerating and where the supply chain solutions are becoming more radical, especially among the pressured “middlemen” of wholesalers and distributors – consolidation, competitors sharing services such as transport and logistics, increasing outsourcing, getting involved with digital editions. Yet behind all these shifts, there is a growing suspicion which is being voiced more openly: that publishers are not fully committed to print, retail or cross-border distribution and that they are simply not putting their “money where their mouth is” especially in terms of promotional budgets and supply levels. Confronting that perception openly is the next stage in a global debate about the future of the press supply chain. To invest in a channel which is still trending down is a bold and strategic move. Yet boldness and strategic intent are what is needed at the moment in order to make the most of a business which remains at the core of the industry and which still has considerable potential.
“There is a growing suspicion … that publishers are not fully committed to print, retail or cross-border distribution.”