The Future of Newspapers

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Newspapers have been a very good business both in Europe and North America. The leaders in their markets usually got margins of profits above 20%.  The USA market is dominated by local papers. Continental Europe is mainly an addition of  regional markets. And the UK is the paradise of national newspapers. The three different models worked very well: those markets had high circulation figures, a lot of advertising income, strong entry barriers and excelent profits.

Internet and free papers have eroded the competitive advantages of paid newspapers. In 2008 newspaper circulation decreased 1.8% in Europe and 3.7% in North America. Advertising will drop 22% in North America in 2009 and a bit less in Europe.

European and American Publishers should change their busines models. They should forget about the “good old times” of mass market one-platform products. Newspapers should become multi-platform brands with several windows of revenue: print, online, mobile devices, and so on. They should take advantage of the power of their brands to capture the “every day more demanding consumer”.

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