News and Insights

Pressing on

Many publishers are struggling to cope in the digital world but a few have managed to buck the trend. How do professional investors such as fund managers determine the winners or losers in this rapidly changing world? 

It is more than 30 years since newspapers first went online, sparking a digital revolution that is still sending shockwaves through the publishing industry today.

In 1981, long before the internet became mainstream, The New York Times and The San Francisco Examiner launched text only services that you accessed on your home computer using the telephone.1 Costing US$10 a day, carrying no pictures and taking over two hours to download, the traditional industry had little to fear.

At the time many dismissed online services as going nowhere. Today it is apparent how wrong those naysayers were. The rise of the web in the late 1990s – and the spread of personal computers, tablets and smartphones – has overturned the traditional publishing model. So, how are publishing companies evolving in this new, uncertain world?

Delayed death

The extinction of newspapers has been heralded for some time but still they survive, in part because the bulk of revenues still come largely from print not digital sources: some 93% of revenues according to the latest World Press Trends survey.2 While digital advertising is expanding fast, significant digital revenues have yet to follow.

Yet, how much longer the print model can survive is a hotly-debated topic. In 2016 British newspaper, The Independent ceased publishing a print version and went completely online.

Many have tried restricting access to digital content by erecting paywalls. However, it does not appear to be the money-making solution the newspaper industry was hoping for. Existing readers have generally proved unwilling to pay for news online or on mobile devices.

“As a business model paywalls have not really worked out,” says Paul Markham, portfolio manager at Newton. “Aside from professional publications like the Financial Times, newspapers have not been very successful at monetising their subscription models.”

One of Britain’s biggest selling newspapers, The Sun, erected an online paywall in 2013 but was forced to reverse the decision in November 2015 after the tabloid failed to attract enough subscribers to make it viable.

The proliferation of smartphones holds out some hope for newspaper executives, raising the prospect they may be able to increase revenue from mobile adverts. However, there are still challenges ahead: reading newspapers, printed or online, is a habit largely confined to the over-40s. The Millennial generation, born after the early 1980s, grew up with laptops, tablets and smartphones and are increasingly getting their news elsewhere.

Niche rewards

In contrast to mainstream publishers, companies producing content for the professional market have been more successful at making the transition to digital. In 1995 Forbes suggested that RELX, the Anglo-Dutch publisher of academic journals then known as Reed Elsevier, could be the “Internet’s first victim”.3 Yet its business model has been remarkably resilient. It publishes hundreds of thousands of articles each year, principally scholarly research.

Dutch company Wolters Kluwers is another publisher that has thrived in the digital world providing information to the legal, financial and healthcare professions. The online world has served to enhance their strong market positions says Markham.

Both companies benefit from control over highly specialised information provided by academics and professionals, content that is essential reading for others working in the field. These firms offer a rare level of stability and continuity in a publishing world that has been upended, Markham concludes.


  1. 1 Wired: ‘Tech Time Warp of the Week: Newspapers Go Digital, 1981’, 17 January 2014
  2. 2 World Association of Newspapers and News Publishers: ‘World Press Trends: Newspaper revenues shift to new sources, 1 June 2015
  3. 3 Forbes: ‘The Internet’s first victim’, 18 December 1995

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