Circulation Revenue Surpasses Advertising for First Time

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Circulation Revenue Surpasses Advertising for First Time

According to the World Association of Newspapers and News Publishers, the amount of revenue generated by circulation dollars was greater than the amount of revenue generated by advertising in 2014. This small piece of information holds some monumental implications for companies that engage in digital media and print media.

What Does This Mean?

The news that circulation revenue outpaced advertising revenue has two significant implications. The first is that it completely alters the media business model that has been in place for over a century. Where it used to be advertising revenue that helped publishers to survive, now it will be subscriptions and other circulation fees that take center stage. This will significantly affect the relationship between media publishers and advertisers.

SEE ALSO: Why Digital Subscriptions are Key to Your Circulation and Bottom Line

The second significant implication is that the digital media world is maturing at a faster rate than ever before and it may not be long before companies that rely on print to survive may have to adjust. Digital media is gaining momentum and along with that momentum comes the very real notion that selling content is becoming more important than selling advertising space.

Time Is Not On Traditional Media’s Side

According to MediaPost.com, the amount of time people spent utilizing traditional media (printed newspapers, radio, and television) to access news dropped by 6.6 percent in 2014, while access to digital media jumped by 83.7 percent. This kind of significant gap, coupled with the overall rise in media revenue, shows that digital media is having a huge impact on the future of publishing.

The overall consumption of media for 2014 was up by 5.1 percent, but it is hard to imagine such a dramatic increase without the growing importance of digital media. Online publishers are in an excellent position to take advantage of the increase in circulation revenue, while print newspapers could be pricing themselves right out of existence.

Circulation revenue

The business plan for all publishers could be changing very soon.

Digital Media Is Utilizing Its Options

The interactive nature of digital media and the rise of mobile computing have been two factors that have had the greatest impact on digital media’s meteoric rise. But with more revenue coming from paywall activities than advertising, it is making industry analysts wonder if advertisers will now have to start developing content that is more appealing to consumers, instead of staying with the traditional ways of marketing.

Digital publishing is still growing and there is still plenty that publishers have yet to learn. But this latest data shows that online publishers are making tremendous headway in altering the way that the newspaper business works. It used to be that advertisers called the shots and that content was altered to appeal to corporations. But with $92 billion in revenue coming from circulation fees in 2014 compared to $87 billion in advertising revenue, publishers now have to rethink their business models and start putting a lot more emphasis on their customers instead of their advertisers.

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3 Thoughts on “Circulation Revenue Surpasses Advertising for First Time

  1. This is great news! Media companies will spend more time focusing on high-value content rather then spending so much time catering to the advertisers. The advertising model propping up journalism has always felt like a cart-before-the-horse thing. Advertising is important, but should always play second fiddle to the primary product, quality journalism.

    • Yoav Guttman on July 21, 2015 at 11:05 am said:

      Regardless, I imagine the tension between the interests of content and advertising will continue well into the future, no matter what drives revenue. Wouldn’t you agree?

      • Definitely, but money speaks. Something psychological happens when a publisher leads a media organization that is fueled primarily by its readers, rather than advertisers. Pandering to the advertiser is not as important when the fuels source is switched.

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