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What the COVID-19 Crisis Tells Us About the Publishing Industry

The COVID-19 crisis is an unprecedented period in recent times, a sequence of events that has suspended large parts of human activity and upset economies all over the world. It may be followed by a major economic recession and trigger deep changes in the way the global economy is organized. Locked in our homes, we live on a day-to-day basis, waiting for the COVID-19 peak to get behind us. Some of us are temporarily unemployed, others working from home. And around us, doctors, nurses, truck drivers, farmers, food store workers and many others are working hard to keep our countries alive.

The publishing industry is experiencing an increased demand for news, quality journalism and content, and can leverage digital channels in reaching its audience. Therefore, for some analysts, COVID19 may be a tipping point to digital transition, a sort of unexpected opportunity. But is this really true

A six-issue crisis

Publishers are experiencing a paradox. On the one hand, there is an incredible demand for information and journalism, and traffic on news websites is booming. But on the other hand, many publishers are facing revenue asphyxiation and must make radical decisions in order to survive. The current situation can be summarized as six main issues:

  1. A sharp drop in advertising revenue, both print and programmatic. Many advertisers have just stopped their campaigns!
  2. The collapse of newsstand sales, due to a combination of newsstands closures and reduced buyer traffic. In France, during the first days of confinement, 1/4 of newsstands closed and sales of dailies and magazines dropped by 40%. And sales to third parties as airplane companies have been reduced to 0.
  3. Challenges with print distribution---especially dailies---affected by reduced postal distribution (in France, the post has limited distribution to three days a week), disrupted home delivery and threats of printing plant shutdowns. The situation in many countries now seems to be under control, but it remains tenuous. And the cessation of direct marketing campaigns and drops in renewal response rates jeopardize print portfolios for the coming months.
  4. A shutdown of diversified activities, such as conferences and events. Such activities have often been a major source of profit in recent years. Attempts to replace them with virtual events are mostly ineffective.
  5. An eCommerce slow-down, due to restrictions on unnecessary deliveries during confinement, and also logistical challenges such as a shortage of delivery people. The French FEVAD organization polled its members in the early days of confinement; 76% of eCommerce players indicated a drop in sales, half of them experiencing more than a 50% drop. Only 12% were experiencing an increase in sales.
  6. A rapid increase in digital subscriptions, driven by highly discounted trial offers. 


With a drastic drop in income, publishers, on a large scale, have decided to put a significant share of their teams on (temporary) unemployment. It is a difficult balance between a strong demand for information and content that requires resources to be available, and the economic struggle to survive by radically cutting expenses.

A no-return transition?

During the first days of confinement, many comments popped up about the survival of the industry. For some publishers, COVID-19 is forcing them to accept the digital transition, to dive into the deep end of the pool, so to speak. The "digital pool," that is. For some who have been postponing decisions for a long time (thinking the water in the pool was too cold), their business is benefiting. Many comments urged publishers to get rid of their dependency on print. Digital is the format of the future.

A “COVID bump” may help to push digital adoption. Numbers provided by several organizations show a rapid increase in web traffic, and an increase in digital subscriptions, especially among newspapers. However, the case is not that simple and progress on the digital front may not be as substantial as expected, once the period is over. Several reasons come into play here:

  • From the beginning, there has been hesitation about locking COVID information behind the paywall. There is still a mindset among journalists to provide information for free during crisis periods, as they do during hurricanes or earthquakes. One may notice that this debate has vanished as the confinement period has extended.
  • Opinions differ as to the best strategy to adopt. For some publishers that have built dynamic paywalls, it is possible to deploy differentiating strategies among their visitors. The weekly INMA newsletter published by Greg Piechota, with the help of Piano, stresses that the core target group that has the highest propensity to convert to paid subscriptions (the "addicts" and the "engaged") has doubled. But it still remains a small share of total traffic, which is dominated by the "fly-bys." For those publishers, their focus is in converting this core group first, keeping the paywall active. Many other publishers have followed a different path. They have opened access to their content with free or low-cost trial subscriptions. Their bet is that the habit created during the two months will enable a substantial conversion to higher rate paid subscriptions afterwards. Even if the rate will be modest, the volume it applies to would provide more conversions than a permanent locked strategy. I’m not sure this will be a winning approach…
  • There is a hidden factor that is not stressed enough: the limited resources to drive sales. Lay-offs and temporary unemployment have also impacted sales and marketing, and technical resources that support digital subscriptions. Therefore, the strategy put in place has to be simple. One of my contacts mentioned to me that a large weekly in France has its circulation manager only working at 20% (being put on temporary unemployment for the rest of the time).
  • Last but not least, the magazine business (different from the weeklies and dailies) remains essentially print (except some publications,) and is not really conducive to a strong digital strategy. Some publishers have pushed easier access to their pdf versions, but their goal remains conversion to their print flagship after the COVID pandemic. 

Once the current crisis is behind us, I am not sure we'll see a transformed landscape. There may be an increased number of digital subs, but not a complete shift from print to digital. 

What the crisis really tells us

Surprisingly, I haven't seen any analyst stressing a key lesson that is obvious to me: digital can't be the stand-alone savior of the publishing industry. Without advertising, without print (note that print readers remain the core audience and main financial contributors) and reliable distribution, without diversification revenues, the publishing industry will collapse under this drop in income. The current confinement period works as a real test of this, and it may be the end for some publishers.

The end of confinement will be the start of evaluation and lessons for our economy. One will realize in the health sector or the manufacturing industry that dependence on suppliers or countries on the other side of the world may jeopardize a country in case of a shutdown of trade and travel. And what about publishing? One lesson would be to reinvest in print and distribution (at least as a long-term strategy), and reconsider strategies to get some of the advertising back, while still pursuing a digital foundation and more diversification to limit risk. More than transition, the industry needs consolidation of its different revenue streams for any long-term sustainability. That is the lesson I am forecasting. Only the future will tell me if I am right.



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