Released on = April 16, 2007, 9:01 pm

Press Release Author = Bharat Book Bureau

Industry = Marketing

Press Release Summary = 27.8% of total media advertising expenditure in the year
ending December 2004 was spent on newspaper advertising and, even though much is
made of the fact that online advertising is taking an increasing share, online
advertising represented just 3.6% of the total expenditure in the same period

Press Release Body =
The Newspaper Industry: Market Assessment 2005

27.8% of total media advertising expenditure in the year ending December 2004 was
spent on newspaper advertising and, even though much is made of the fact that online
advertising is taking an increasing share, online advertising represented just 3.6%
of the total expenditure in the same period.

Total advertising expenditure in the year ending December 2004 rose across the
board, by 5.6%, with newspapers themselves enjoying increases in revenue of 3.7%
(national newspapers) and 5.7% (regional newspapers) over the previous year.
Forecasts for 2005 also see increases in revenues from both advertising and copy
sales - despite falling circulations across the board.

A large percentage of newspaper income is derived from classified advertising,
especially in the regional press; many newspapers are maximising the power of the
Internet to realise even greater value from this revenue stream, with major
acquisitions being made by the larger newspaper groups in this area.

However, falling circulation figures are of concern to the industry and newspapers
are using ever more sophisticated techniques to boost these figures. DVDs, for
example, lend themselves readily to newspaper cover mounting and are also being used
as a vehicle for advertising. Cover sales are proven to increase when newspapers run
both DVD and CD campaigns alongside other marketing initiatives, which include the
traditional competitions. Another boost to newspaper circulation figures in 2005 has
been the Sudoku phenomenon. Sudoku is an addictive game for its devotees, as much as
their daily crossword, but may serve only to keep existing readers buying their
daily newspaper, rather than attracting new readers.

Readers, especially older ones, are not migrating away from newspapers to the
Internet as rapidly as might have been predicted: exclusive research commissioned by
Key Note for this report shows that the number of respondents turning to newspapers\'
online sites is very small - just 5% agreed with the statement `I often visit
newspapers\' websites to get more information on things that interest me\'. This is 2
percentage points fewer than those that agreed in the same survey conducted in 2003.

Nonetheless, it is older readers who are more wedded to their newspapers - both
national and local. As might be expected, the younger age groups are more likely to
use the Internet, or their mobile telephones, to learn of news that interests them.

Despite falling circulation figures, people\'s appetite for news is unquenchable.
News can be delivered to anyone at any time as the stories break. Advances in
search-engine technologies allow for a continuous searching of news sites across the
globe for the harvesting of headlines to be aggregated and delivered to customers in
real time. News aggregation is attracting a new breed of news distributor - Internet
service providers (ISPs) and search-engine developers - with MSN, Yahoo and Google
all active in this market.

News agencies themselves, which, like newspapers, employ journalists to collect and
write news, also use news-aggregation tools in order to deliver news to their
customers. This report includes a new section on news agencies, as well as profiling
leading organisations in both this market and that of news aggregation.

Arguably, one of the most important developments in the newspaper industry in 2005
has been The Guardian\'s change of format, from broadsheet to `Berliner\'. It is the
first newspaper to be published in this size - slightly bigger than tabloid - in the
UK, although the format is used for several newspapers in Europe. The format was
introduced in September and The Guardian has reported a positive effect on its
circulation figures.

A further important development was the purchase of The Daily Telegraph by Sir David
and Sir Frederick Barclay. As will be seen from the comprehensive newspaper history
given in Chapter 2 - Strategic Overview - of this report, major national newspaper
groups have not changed hands very often in the previous 100 years. This sale thus
marked the final demise of the Hollinger Group in the UK.

A further demise was Fleet Street itself. Reuters, the famous news agency, finally
left `The Street of Shame\' in 2005 in order to take up new headquarters in
Docklands. Reuters is profiled in Chapter 9 - Company Profiles.

This report also looks at news from a global perspective. New technology allows the
gathering of news from all corners of the globe, including from individuals\' weblogs
(blogs). Yet there are many places where journalists risk their lives in gathering
and writing the news. During the compilation of this report in November 2005, the
newspaper industry was relieved that a kidnapped Guardian journalist, reporting in
Iraq, was released without harm. However, many others have not been so fortunate and
these sacrifices are not forgotten. This report acknowledges the work of those
agencies working to maintain and extend the freedom of the press.

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