The impact of web traffic on revenues of traditional newspaper publishers 2 Newspaper publishing in the internet era The European market for newspapers is characterised by diversity of tastes, titles, and print circulation. Figure 2 shows the leading newspapers in the four markets considered in this study. Tabloids, i.e., papers that include many photographs and focus more on popular stories, dominate readership in the UK and Germany, whereas quality press titles, which tend to give more detailed accounts of world events, business, or culture, lead the markets in Spain and France.1,2 The circulation varies according to title as well: Bild, a tabloid, had on average 2.3m readers in 3 Germany in 2014 while the Spanish El Pais, a quality paper, had on average 360,000 daily readers in 4 the same year. The reach of these papers also extends online, where they can have millions of 5 readers every month. However, print circulation has been declining and new online revenues currently do not offset the losses. Traditional newspaper publishers therefore face challenges on a number of fronts. Figure 2: Circulation of selected leading newspapers in France, Germany, Spain, and the UK United Kingdom • The Sun (2.2m) • Daily Mail (1.8m) • Daily Mirror (1.0m) • Daily Telegraph (0.6m) • The Times (0.4m) France • Ouest France (0.8m) Germany • Le Figaro (0.4m) • Bild (2.6m) • Le Parisien (0.3m) • Die Zeit (0.5m) • Le Monde (0.3m) • Frankfurter Allgemeine Zeitung (0.4m)* • Liberation (0.1m) • Suddeutsche Zeitung (0.4) • Die Welt (0.2m)** Spain • El Pais (0.3m) • El Mundo (0.2m) • La Vanguardia (0.2m) • ABC (0.1m) • El Periodico de Catalunya (0.1m) Source: Deloitte analysis of circulation audit bureaus figures for 2013 except for * FAZ.net statistics; ** Axel Springer statistics. Figures represent 2013 workday print circulation. 2.1 Business models are evolving The Internet has profoundly impacted newspaper publishers. The operating model of selling news to readers and, in turn, the readers’ attention to advertisers has been disrupted by the online space. Consumers split their attention among more sources and advertisers divide their budgets among more publishers. Together, these changes have contributed to the long-term trend of decreasing circulation and revenues for newspaper publishers. 1 Collins Dictionary (2015), ‘Definition of “tabloid”. Retrieved from: http://www.collinsdictionary.com/dictionary/english/tabloid 2 Collins Dictionary (2015), ‘Definition of “quality papers”. Retrieved from: http://www.collinsdictionary.com/dictionary/english/quality-papers 3 Meedia (2014), ‘Die große IVW-Analyse der Zeitungsauflagen’. Retrieved from http://meedia.de/2014/04/23/die- ivw-analyse-der-ueberregionalen-und-regionalen-zeitungen/ 4 Association pour le Contrôle de la Diffusion des Média (2014) 5 Deloitte analysis of comScore data. Deloitte LLP. 6