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News

Dmitry Martynov : The situation in the print media market is difficult, but not hopeless

At the ongoing XXV media conference in Turkey the President of the Association D. V. Martynov made a presentation, with a detailed analysis of the current problems of printed media in Russia and abroad. The report gives estimates of actual changes in the periodical market, innovative solutions implemented in the media business are discussed, contains recommendations for the further development of the industry in relation to the existing realities in the country.

Describing the situation in the Russian media market, the speaker noted the decline in sales of periodicals, reducing the profitability of its distribution, an increase in the level of arrears, liquidity issues in current and long-term activities in media companies, a growing number of bankruptcies among manufacturers and distributors of newspapers and magazines.

However, not all is bad, said D. V.  Martynov, there are also positive trends in the market. Among them - the annual appearance of new publishing projects, helping to maintain sales volumes of periodicals , creating in some regions modern business models of the press sales, increasing the economic efficiency of the kiosk networks. Very indicative is the position of some authorities who demonstrate an understanding of the problems of the industry. This, in particular, is taken by the Ministry of Communications on "Recommendations for the support and development of the retail distribution of periodicals and other printed materials in the Russian Federation". Specific measures to assist in the development and improvement of the capital press distribution services is implemented by the government of Moscow.

However, the print media market Russia not the first year shows a negative trend, both in quantity and in value terms. Profitability of print media distribution in all format categories has been steadily declining. Proceeds from sales of the press in one shop falls due to reduced customer demand, and the costs increase as a result of growth in rental rates, prices of fuels and lubricants , etc. In the case of closing unprofitable outlets market immediately lose up to 20 % of existing sales. It is important to bear in mind that the unprofitable media outlets are available in all countries in Europe, but here the publishers compensate for the loss of the distributors of the press in accordance with the current system of agency contracts .

The Moscow market left one of the largest retail networks - "DM- Distribution" network, due to losses. The outlets in the metro of "Our press " ceased to operate because of unaffordable exorbitant rents. Financial problems were revealed in a commercial network "Makspress". Wholesale company "Quadro Company ", delivering newspapers to the "Makspress" network is recognized as a bankrupt.

In various regions of Russia the problem of availability of stalls / press pavilions is solved in different ways. The leader in this indicator, and hence on the availability of print media, is Chelyabinsk, on the territory of which there are over 700 press stalls. Thus, one kiosk has to stand for 1430 inhabitants in Chelyabinsk. In addition to the stalls here are functioning also press distribution supportive models.

The high level of provision is also noted in Vladivostok , Voronezh, Yekaterinburg, Izhevsk, Irkutsk, Krasnodar, Krasnoyarsk , Oryol, Sochi. In these cities, one kiosk serves 2, 000 - 2, 200 people.

According to D. V. Martynov, reducing the number of retail press outlets  - is a global trend. In Europe, their maximum reduction is reported in France (-8 %), Spain ( 6% ) and Italy (-6 %). In turn , the Russian market for the last 5 years has lost 14% of sales outlets .

In conclusion, D. Martynov announced recommendations of PDA that seems appropriate to implement in order to further develop the media business :

- To continue the development of all the distribution channels of printed media;

- Seek to reduce costs throughout the whole chain of press distribution;

- Implement measures to implement technological (including logistics) processes;

- To achieve a significant increase in sales performance;

- Put into practice the "Recommendations" contained in the Order of the Ministry of Communications ;

- Carry out the development and implementation of mechanisms to support the industry by the federal and regional authorities;

- To practice packet selling of advertising space in printed and digital media ;

- Enforce the use of city-size retail outlets in the press points;

- The transition to sales oriented publishing business model of printed and electronic versions of publications;

- To increase trade marketing activity of printed media sales;

- Use of the Internet to promote and increase the sales of printed and online versions of the publications;

- Actively use new technologies (QR- Code , NFC tags, etc. ) to increase the value of the paper content;

- To implement the optimization of business processes with the publishers and distributors of digital technology;

- Explore the possibility of introducing in Russia agency relationship between publishers and distributors of media with the introduction of a fixed price on the cover and a clear system of payments.

Presentation by D. V. Martynov  caused an active discussion at the conference and in its lobby.

The whole complex of arrangements for the rescue of the printed media in Russia, proposed by PDA’s President, was continued in the reports of conference participants.