The Australian newspaper advertising market will continue to decline over the next five years, with increases in digital expenditure unable to offset the losses in print, according to PwC.
The PwC Media and Entertainment Outlook has predicted the combined newspaper advertising market will decline at a average compound annual growth rate (CAGR) of 7.5% to $1.70 billion by 2017.
Print newspaper advertising will lose $628 million between 2013 and 2017, declining at 10.7% CAGR to a projected $1.21 billion. The digital newspaper advertising market is set to increase at 5.6% CAGR to $489 million in 2017.
Meanwhile, circulation revenue for print and digital combined is expected to decrease at 6.6% CAGR to $1.1 billion by 2017.
Despite the declines, PwC says there is "reason for optimism" as newspaper publishers embrace the challenges and opportunities of the new economy.
"People are consuming more news than ever. This means success for newspaper companies will depend on being nimble enough to meet the ever-changing demands for real-time news and other services," the report says.
It notes the move by Australian mastheads to digital paywalls, and that while it is "too early to judge the viability of Australian models", in June The New York Times reported increases in circulation revenue that outstripped declines in advertising revenue.
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