The impact of web traffic on revenues of traditional newspaper publishers referred to newspaper publishers’ websites from referral sites alone has led to an estimated 0.42% 51 increase to the publishers’ overall revenues. To estimate the total value attributed to referral traffic, the calculations assume a 100% decrease in referral traffic to publishers’ websites. This suggests that an estimated 4.2% of newspaper publishers’ 52 total revenues are driven by referral traffic. As the figure represents an average effect, referral traffic can represent a higher share of revenues for publishers with more substantive online operations and vice versa. These results were converted into monetary values by combining them with the sizes of the total 53 newspaper markets in each of the four countries. The calculation assumes that the relationships estimated in the sample of 66 publishers extend to the whole market. On this basis, total web traffic to newspaper publishers generated an estimated €1,128m across the 54 four markets in 2014, whilst referral traffic generated an estimated €746m. The contribution of total web traffic and referral traffic to publishers in individual countries is listed in Table 3. The relative size of referral contributions in each market isdriven by the differences in sizes of the overall newspaper markets. Table 3: Impact of total web and referral traffic on publishers’ revenues (2014) Market Publishers’ total Estimated value of total web Estimated value of referral revenue (€bn) traffic (€m) traffic (€m) France 3.5 224 148 Germany 7.7 494 326 Spain 1.5 96 64 UK 4.9 314 208 Total 17.6 1,128 746 Source: Deloitte analysis. Total market estimates from PwC. Figures may not sum due to rounding The results represent the estimated aggregate revenues that newspaper publishers in the four markets derived as a result of referral traffic. For example, these revenues could have been generated from ads provided by any provider, or any other source of monetisation that is based on web traffic. The estimated revenues from referral traffic represent approximately 4.2% of publishers' total revenues. The estimated revenues from overall web traffic then account for approximately 6.4% of their revenues. The findings are consistent with the broad newspaper publishing market, where publishers generate approximately 10% of their revenues via their online channels. While publishers can generate traffic and revenues by making their websites accessible via referral sites, the opposite is also true. For example, newspaper publishers in Germany and Spain experienced declines in website traffic after Google had to change the format of its results. In Germany, some newspaper publishers prohibited Google from displaying news snippets along with the hyperlinked headlines. Participating publishers saw declines in visits as news readers opted for competitors that 55 retained the snippets. In Spain, a shutdown of Google News following a court ruling reduced the 56 number of visits to news sites by 5-12%. 51 See Section 4.2.1 for explanation of valuing visits from different sources. 52 Deloitte analysis. Market sizes data from PwC (2014), ‘Global Media and Entertainment Outlook’ 53 Estimates of total market sizes were sourced from ‘Global Media and Entertainment Outlook’ published by PwC (2014). 54 As advertising represents the dominant model for funding online websites, the contribution primarily consists of advertising revenue. However, the holistic nature of the econometric analysis means that the overall contribution also includes any shares of revenues from paywalls and other means of monetisation that are driven by traffic. 55 Reuters (2014), ‘Germany's top publisher bows to Google in news licensing row’. Retrieved from: http://www.reuters.com/article/2014/11/05/us-google-axel-sprngr-idUSKBN0IP1YT20141105 56 telecompaper (2015), ‘Spanish news sites down up to 12% after google News closure’. Retrieved from: http://www.telecompaper.com/news/spanish-news-sites-down-up-to-12-after-google-news-closure--1062419 Deloitte LLP. 16