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News

The periodicals prices growth in Russia in 2012 broke records of the previous two years

The volume of the printed press retail market in value terms, despite the negative dynamics of sold copies has remained stable since 2009. Losses from reduced circulation are compensated by the price growth for printed press.

According to the monitoring of retail prices for the press, within 2010 and 2011 the price growth for the printed media was estimated at 23% in total. In 2012, the trend of price growth for periodicals was not only continued, but intensified.

According to the recent improved data of Rosstat, inflation in the country over the past year did not exceed the forecasts and reached 6.6%. However, the press  prices significantly differed from the general trend and increased substantially. Over2012 the printed pressretailprices wereincreasedby12%.

It should be noted that the price increase was not evenly. In the first half of the year press distributors have struggled to stabilize the retail prices in the market, consumers were not fully informed about the publishers price growths.For example, the prices of women's and men's glossy magazines, business and patchwork press were corrected only to the level of inflation expectations, as an average.

However, for the period from January to June only, the press prices went up by an average of 6%.Third quarter became the growth driver. The reader had to pay almost 5% higher for the favorite periodical in October than at the beginning of July. Thus, in the autumn of 2012 prices for periodicals exceeded that of the last two years and made it more than 11%.

The results of analysis of the cost of periodicals at the points of sales for the fourth quarter were somehow unexpected. Although experts predicted a further significant growth of prices of press, to the end of 2012 prices have been stabilized, and in some formats they were even declined.

On average, the periodicals market has risen by no more than 1%. First of all, it is explained by the fact that the publishers who previously quarterly review prices upward, acted differently in October-December. Some of them continued to increase selling prices, and some, trying to make their products more accessible to customers, reduced the cost of most of their publications.

These opposite changes led to the situation, where the market prices in general were not significantly higher than those of the last quarter.

Most notable was decline in patchworks, that up to this point the prices were growing continuously. Constant output of new collections, and reduced interest in the "protracted" editions led to the saturation of the market and the need to stimulate the buyer. This was done, in particular, and by reducing prices by an average of 9%.

In particular, at some points of sales prices of patvorks, such as "Coins and banknotes" and "Autolegends" got cheaper. Many distributors have reduced the prices of daily newspapers, news media and TV guides. This change is estimated to be about 5%. The business press has also become more affordable, reducing prices by an average of 2%. 

Buyers of  "Ogoniok", "Telenedelya", "Snob", "Itogi" and several other publications could slightly reduce their spendings. Such print media as the "World News", "Novaya Gazeta", "Antenna-A4-Telesem", "Seven Days», «New Times», «Company" and "Secret of the firm" rose their prices or remained as they were.

The price tag on glossy and automotive publications remained at the level of October. Only some of the magazines had escaped from the total, those were “Moto” and “Auto tuning”, they became a bit more expensive, and some magazines for women. For example, readers of “Beauty” and “Liza. Otdohni!” had to increase their expenditure by 5-15%.

Prices for the yellow press and publications about the stars were risen more in the fourth quarter of 2012. Onaverage, theirvalueincreasedby 9%. Much more expensive became «Speed info" and "Express-gazeta," a little less - «StarHit» and «Only stars".

If we compare the growth rate of prices in different segments of the press distribution market, within a year the prices of periodicals steepest increase in non-specialized media objects (food retail) and the non-stationary retail. So, with an average growth of prices in the market at 12%, the press in supermarkets has risen by more than 20%.

The greatest increase in the price of the print media in the grocery retail sector, as well as the market in general, was in the third quarter of 2012.

At the same time, kiosks and pavilions of the press in the year tried not to transfer the growth of publishing costs to the final consumer. They even managed to finish the year with inflation of 5%, which is lower than the Russian average.

Dynamics of retail prices for the print media in a variety of formats, in%

Format type

Retail prices growth in 4 qw. of 2012

Retail prices growth in 2012

Kiosks and pavilions

1%

5%

Non-specializedfacilities (food retail)

- 1%

24%

Non-stationary retail objects (trays, „ruchnik”)

3%

11%

Mini-markets of press

2%

8%

The averagemarket

1%

12%

Source: Data from monitoring of retail prices of CJSC "Consult-Center"

In 2013, according to the experts, press distributors can no longer restrain the growth of retail prices imposed by publishers, who will continue to raise selling prices. Thebanonalcoholadvertisinginnewspapersandmagazines, which came inforcefrom 1 January 2013 willaffectthemarketinthefirstplace.

We would like to recall that the amendment to the law "On Advertising" was adopted in July 2012, when the print media have given an extension to six months, to enable them to fulfill existing contracts with manufacturers and retailers of alcoholic beverages.

There is high probability that in the near future the Russian government under the pretext of anti-smoking campaign can limit the advertising of tobacco products, as well as medicines and dietary supplements.

Publishing houses, which are more dependent on the advertising budget, has already lost a significant part of it, and probably will try to compensate it by increasing prices.

Reducing advertising fees force Russian publisher’s  to move from their business model from advertisement-centric to sales-centric, as their foreign colleagues. That is, in the short term, more emphasis will be placed on the profitability of sales by subscription and retail.

And the issue with the import taxes on coated paper remains unresolved. The growth of publishing prices could result in the raising of taxes on some types of paper expected in February.

Despite these conditions, we should not forget, that in the situation of shrinking demand every year, a significant increase in retail prices for periodicals will only lead to further cost savings on the purchase of publications and fall selling runs. So there is every reason to believe that retail prices on the press in 2013 will not exceed 10%.

Source: PDA