The transformation of the US newspaper business will reach its tipping point in four years’ time. According to PwC’s Global Entertainment & Media Outlook 2022-2026, by 2026 the industry is set to see commercial digital revenue surpass that associated with the paper product, and will in principle be the first major market worldwide to complete that milestone.
This development will largely be driven by a steady decline in print advertising. PwC expects print advertising to fall from $7 billion last year to $4.9 billion in 2026. This decline will not be covered by digital planning, which will only increase by $251 million. The two trends will intersect at around $5 billion in four years’ time, with the latter already slightly ahead, as part of a transition that the pandemic has helped to accelerate.
PwC forecasts that already this year the industry will earn more from circulation than from commercial turnover.
In that immediate future of a net loss of some $2.4 billion in advertising revenue, the importance of circulation revenue, both digital and print, emerges. According to PwC, they will outstrip commercial planning later this year. All this despite a context of declining circulation in these media, which will lose 3.3% of circulation annually until 2026.
The report attributes a significant part of this change to the fact that the US local press is facing a crucial problem for its survival: its declining impact in print and the fall in associated advertising from nearby businesses and shops is aggravated by the inability to compete with the large platforms in digital planning, both in terms of cost and segmentation.
This trend explains why in 2020 a UNC Hussman School of Journalism study concluded that a quarter of US newspapers had disappeared in the previous 15 years. News deserts are becoming larger and more numerous in the US, which in turn leaves citizens less informed and less engaged with their immediate community in a scenario of political polarisation.