Lost on paper, acquired online: how the media survived lockdowns and pandemic

Yelena Ivanova, Natalia Seibil

Pensioner Gennady lives in Mitino. Every week he receives 70 packs of free newspapers and magazines, 5 kg each, and delivers them to outlets. A year ago he had 55 of them, now there are 46 left - some libraries refused to receive his products. For delivery, Gennady receives 17 thousand rubles a month, plus gasoline - some of his points are located in Zelenograd. He immediately hands over 50 packs of freshly printed press to waste paper. At the reception point, 1 kg costs 13 rubles. 3250 rubles - an increase in pension. He delivers the remaining 20 packs around the district and sends a photo report - they say, the cargo has been delivered! In a day or two, Gennady again goes around his points and collects the remains. As a rule, there are ten - fifteen packs left, and he also delivers them to waste paper. Gennady does not delve into the complexity of the publishing business, but sees by his own example - and distribution points are becoming less and less, and newspapers are read less and less. The crisis is evident!

2020 for media managers was like a roller coaster: in the second quarter, the market collapsed by 23% , and in the third quarter, the decline slowed to -4% , at the end of the year, media locomotives - television and the Internet - led the market even to a plus of 4% . According to AKAR, the worst of all in the first year of the pandemic was the publishing business - here the drop was 22%, and in the print itself - 47%. Ruslan Novikov, General Director of the publishing house "Argumenty i Fakty", Vice President of the Union of Printing Industry Enterprises , recalls:

- At first, we very quickly fell by 20-30 percent, literally in one and a half weeks, and then grew by 5% every week since the restrictions were lifted. Cumulatively, if you look at 2020 for the market as a whole, if retail sales fell from 5% to 8% per year among the leaders, I think that the pandemic year gave an average market drop of 12% - 15%. This is the share that we have not collected and will not be able to recover.

Despite the fact that in Moscow newsstands remained open during the pandemic, sales have practically stopped. After the quarantine was lifted, the market had just begun to recover, but the next trouble overtook it - the main distributor of printed materials, Rospechat, announced the sale of its network of kiosks throughout the country.

"The market in 2020 was catastrophically losing points of sale of circulations in cities such as Krasnodar, Rostov, Novosibirsk. Despite the fact that 30-40% of the kiosks remained from the former "Rospechat", at the moment the circulation has recovered by 85-90% of the "pre-pandemic" indicators. There was a flow of newspaper sales into retail", - says Irina Dyagtereva, deputy general director of the Komsomolskaya Pravda media group.

Both AiF and Komsomolskaya Pravda are market leaders. They have several lines of defense against the economic "bad weather". In KP, for example, says the director of the advertising service Angelica Sulkhayeva, revenue in print fell by 20%, but in digital it grew by 35%. By the way, "Komsomolskaya Pravda" is now called not a publishing house, but a media group:

"The name change is a key story. Now we are positioning ourselves not as, first of all, a print media, but as a multimedia holding. We have had a significant share of digital income for quite a long time - in 2019, the share of online was 50%. In 2020, it reached over 60%".

Major publications went well on the market, says Pavel Miroshnikov, Acting President, executive director of SPPI GIPP (UNION OF PRINTING INDUSTRY ENTERPRISES). At the end of 2020, a publishers forum was held and participants showed data from Ipsos research. For a number of publications, the audience has grown significantly, not only in weeklies, but also in daily newspapers:

"Many publications have noticeably strengthened their positions in digital resources, there has been an increase in traffic, in general, up to 40% - 50% on digital resources. This was reflected in the advertising results as well. According to the classic print, the market volume decreased to 8 billion, a decrease of minus 47% in 2020. But this is precisely according to the measurements that Mediascope traditionally carried out".

Market outsiders have lost about half of their earnings. First of all, medium and small regional publications were affected. According to the Union of Journalists, 44 regional media outlets, mainly regional newspapers, were closed. The UJR surveyed 400 journalists on how they and their publications survived 2020. 86.4% of editors noted a decrease in the number of advertisers or a decrease in their advertising budgets. 40% of editorial offices were forced to fire every tenth employee. 17.5% of journalists lost more than a fifth of their salaries. Circulations were reduced in every third edition. One in three media outlets have benefited from government assistance. The chairman of the Union of Journalists of Russia, Vladimir Solovyov, proudly says that the UJR, together with other public organizations, managed to break into the government, after which the media industry was included among the most affected by the pandemic. This saved many media outlets, from Komsomolskaya Pravda to regional newspapers and websites:

"As we calculated at our Sochi Journalistic Forum, about 30 thousand media outlets were able to receive help, which means they were able to survive and save jobs. This help continues, and there is such a life hack: you can go to the website of the tax service and enter your TIN. And you may be surprised that you may be entitled to additional government assistance".

For regional TV companies, the Ministry of Digital Development, in order to save money, made it possible to broadcast only during the day and at prime time, and stop broadcasting at night. There were proposals to return advertising for beer and alcohol, but the Russian authorities did not agree to this, although this could really help the media. For a long time, no checks were carried out in the print media, fines for late payment of taxes were canceled, postage rates were regulated, and this gave many an opportunity to survive.

But where did AKAR count the loss of the press in almost 50%? Ruslan Novikov says that a whole segment of the press, in principle, fell out - newspapers for free ads:

"The hardest blow this year was dealt to the free press, because, in fact, for six months to eight months the free press was unavailable. In addition to the one that is delivered to mailboxes, the one that is published by the mayor's office - district newspapers that are distributed through mailboxes, everything else has lost all advertisers".

I think that the niche press will somehow recover, and all the free ones are now in a very difficult situation. New players are more likely to appear than old ones survive. But this gave a new challenge, new technologies, new advertisers.

However, Pavel Miroshnikov clarifies that the recorded drop in free publications does not take into account. Until 2018, AKAR included them in the results of the year, but then they went out of sight. In actual figures - the results of all publications that fall into Mediascope. Angelica Sulkhayeva believes that the pandemic will accelerate the trends that already existed in the market. With the growing share of viewing on the Internet, advertisers are getting a taste for new forms of promoting their goods and services, which are only possible in a new environment:

- Our online advertising has become equal to advertising in print. In the print, the formats are clear and limited to the area of the newspaper. Advertising in digital is not limited to area, volume. It is multifaceted and multi-format. Yes, the placement of a banner in a media blog at the cost of an SRO (advertising efficiency indicator - noted by Novye Izvestia) may not be so high, but it all depends on the amount of traffic and on the spin on which the banner will be rolled to a million audience. One special project on the site can cost several million rubles. It all depends on the number of formats, saturation, integration that we have laid there. What is it: longread, interactive, test? How long does it take? In print, advertising is limited to the date of the newspaper's release. Came out, worked for a week, if it's a weekly edition, it's gone. On the Internet, we can more flexibly solve the problems of the advertiser.

Ruslan Novikov does not show euphoria, although the AiF has increased its online advertising revenues by more than 25% compared to 2019:

"Digital did not fall at all in 2020, it grew, but it cannot compensate the ruble to the ruble for the fall that was in the print. We understand that we have completely different prices for the two media. If we talk about print, then large publishers have several million rubles per page, and digital placement - hundreds of thousands. The price usually differs by an order of magnitude. Therefore, there is no direct compensation, but digital has come to life very strongly".

Vice-President of the Association of Communication Agencies of Russia AKAR Mikhail Simonov considers the pandemic a catalyst that led to the fact that advertising went to the Internet and television. Advertising follows the consumer, he reminds:

"We are now at the Silver Mercury festival (advertising films), collecting applications for the past year. I see that we have much more applications this year. It seems to everyone that the volume of advertising has decreased. In reality, in terms of the number of applications, we are 15-20% ahead of the last year's schedule. Leading brands paid attention to socially important aspects, what was happening in the country and in the world, and supported doctors, patients, social distances. Car brands encouraged people to stay at home. Very interesting campaigns from Toyota, MTS and Sberbank. In terms of placement, these campaigns took place on television too, but more, of course, digital".

Advertisers predict online growth in 2021. If in 2020 the entire Internet grew by 4%, then this growth will double, according to the advertising agency Group M, and this is the most conservative forecast. Optimists say that growth could reach 14%, however, in the event that the entire economy begins to recover rapidly. However, the market is getting bigger and it will be impossible to maintain the same growth rates as in 2019.

For publishing houses that are rebuilding themselves into multimedia companies, offering their former readers everything - from news to videos, radio, podcasts and events - the new reality does not give explosive growth, but it does not threaten with losses, says Ruslan Novikov:

"If there is no further deterioration, new waves of the pandemic, I think that at the level of decline that we had in 2020, we will return to the dynamics that we had in 2018 - 2019. If we talk about print, then this is a 5% -8% drop for leaders per year. For everyone else, the print drop will be 10% - 12%, well, we are planning the growth of the digital audience. I think the market will grow 8% - 12%, I mean the audience. We are pledging more for ourselves, but in terms of money, advertising will remain at the same level as in 2020, maybe it will grow a little based on the results of 2021".

There is another source of income that is not taken into account. The acting head of the Union of Printing Industry Enterprises (SPII) Pavel Miroshnikov points out that in many publications a significant share of the income in 2020 was occupied by advertising that does not fall into Mediascope, and, accordingly, it is not included in the final assessment of AKAR. These are, for example, messages without the label "advertising material", native advertising and messages posted under government contracts. in the SPII this year, measurements were taken of 11 largest publishers and found that out of 8 billion in print revenues, 1.2 billion of the publications earned on official information.

"This is not "jeans" (paid materials - "NO"), this is completely official information. It was about government contracts that went through many print media and contained information on behavior in a pandemic. There were various news and messages from the Pension Fund, information that was not measured and was not reflected in the Mediascope report. We see this as income from official information communication. There is no mark “as an advertisement”, there are no parameters that Mediascope takes into account, but this is the official income of publishers, which is simply not considered yet. We have now started a conversation with AKAR, with the coordination council of the communications industry, to amend the Law on Advertising and introduce the concept of "Social Advertising" there, which would include such types of communication to consolidate this new practice".

Do not forget that elections to the State Duma will take place this year. Only the editorial staff will know what percentage of the content will be covered under the heading “election advertising”, and what will hide behind the usual information materials and reports.

Publishing houses began to distribute newspapers for free, maintaining the circulation of 2019. Such programs for ministries and departments, administrations, airports, business lounges, Sapsanov are in many publications. If retail distribution or subscription declines, these copies are added to the free circulation. For them, audience metrics became important, not circulation revenues. Digital comes to the fore, bringing media houses from 30 to 60% of revenue. Another source of income is various events that are organized under the brands of newspapers and magazines. In business publications, event revenues can be up to 50%.

The death of print media has been talked about for 15 years, market participants say. But paper is a unique format that does not accept a "second" screen. Over time, paper newspapers and magazines will become a niche product. Probably, daily newspapers will finally go online, while weeklies and magazines will be made for a smaller audience and will become of better quality.

Angelica Sulkhayeva says:

"The press takes on exclusive meaning when an elite audience remains and reads the newspaper, because they need clear, verified information delivered to them in the format that they have become accustomed to for years. This has its own demand from the advertiser. We are now recruiting people, because we have a huge number of areas that need to be developed, first of all, on the website, at the KP radio station. We are on a course for leadership in the information field. To do this, we need good highly paid professional staff, whom we are now recruiting".

A crisis? What a crisis!