Free newspapers & new media squeeze paid newspaper market in Hong Kong

The launch of free newspapers such as am730, Headline Daily, Metro Daily and The Standard, combined with consumers’ increasing online media consumption has transformed Hong Kong’s media landscape and placed greater pressure on paid newspapers according to the latest Nielsen Media Index Survey, which was conducted between July 2010 and June 2011 (before the recent launch of Sharp Daily and Sky Post).

The Nielsen Media Index, first introduced in Hong Kong in 1969, is a unique single-source multi-media survey that provides insights into media habits, lifestyles, attitudes and product consumption of consumers across nine markets in Asia Pacific. Released quarterly, the latest study in Hong Kong polled over 6,000 individuals aged 12-64 via a combination of face-to-face and online interviews.

The latest study revealed readership of daily newspapers (excluding online readership) has dropped 6 percentage points since 2009. During the same period, readership of free newspapers has risen from 27 percent in 2009 to 36 percent this year.

Despite the drop in readership, Hong Kong has the highest newspaper readership in the region.  Singapore comes a close second in terms of newspaper readership and similarly to Hong Kong, is also showing a decreasing trend.  Markets like Indonesia, Philippines, Taiwan and Thailand also follow this trend.  The only market covered by Media Index that shows an increase in newspaper readership was Malaysia, due to the popularity of tabloid news.

Although daily newspaper readership in Hong Kong has declined over the past few years, there has been a notable increase in the number of daily newspapers that readers read, from 1.3 in 2005 to 1.9 today.  “As the results were based on fieldwork conducted before the launch of Sharp Daily and Sky Post, it is expected that the total number of daily newspapers read by consumers will further increase and thus lead to a further expansion of the free newspaper market,” said Celia Fan, Director, Media Research, Nielsen Hong Kong, “Readership of free newspapers has increased while the number of paid newspapers read has declined from 1.2 to 1.0 over a two year period, highlighting the  impact that  free newspapers is having on paid newspapers.”

The Nielsen Media Index results also revealed that consumers are increasingly spending more time reading free newspapers, from 42 minutes in 2010 to 45 minutes today whereas time spent on paid newspapers has remained constant over the years at about an hour.

Threat from New Media

While paid newspapers are facing increasing competition from free newspapers, the emergence of new media is also impacting newspaper reading habits.  According to Nielsen Media Index, the number of people reading newspapers via the Internet, mobile phones and mobile devices has increased by almost three times in the last two years, from three percent to 11 percent this year.

“From texting to video to social networking, mobile phones are taking an ever-expanding role in consumers’ daily lives. As mobile devices become an essential item of our lives, people can access and read news anytime, anywhere without the constraints of connectivity.  According to the Mobile Applications Survey jointly conducted by Hotmob and Nielsen in June, news mobile applications are the most used applications amongst mobile phone users in Hong Kong.” Fan commented.

Although paid newspapers are experiencing a threat from free newspapers and new media, paid newspapers still play a very important role amongst readers who only read them, observed Fan.  More paid-newspaper-only readers compared to free-newspaper-only readers regard newspapers as the most trusted source of news / information, a medium to turn to for in-depth analysis and more importantly, a medium that they cannot do without.  As some survey respondents commented, free newspapers allow people to quickly glance over the major news but paid newspapers provide more indepth analysis to let readers understand what is going on.

What’s Next?

With the launch of another two free newspapers, Sharp Daily and Sky Post, and more newspapers offering news mobile applications, newspaper consumption is likely to increase and change as new media offerings come to the market. It’s therefore critical for media owners to diversify their platforms to reach readers and for advertisers to target their consumers more effectively as a result of the emerging and ever-changing media trends.

“Newspapers, no matter paid or free, will face more intense competition than ever before. It is vital for newspaper owners to differentiate themselves from the others and build a unique image in readers’ mind,” said Fan.