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.
- A sharp drop in advertising revenue, both print and programmatic. Many advertisers have just stopped their campaigns!
- 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.
- 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.
- 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.
- 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.
- A rapid increase in digital subscriptions, driven by highly discounted trial offers.