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Anti-adblock measures gain momentum as traditional media pull through hard times

SNL ImageGuardian Media Group CEO David Pemsel at the FT Digital Media Summit
Source: FT Digital Media

Traditionalprint media in the U.K. are looking at anti-adblock filters, amid steep declinesin print advertising and a rise in adblocking across the global newspaperindustry.

Thechief executive of the Guardian Media Group, David Pemsel, said its daily newspaper, The Guardian, is assessing plans to introduce an anti-adblockfilter and a tiered subscription to its content over the next three years.

Speakingat this week's FT Digital Media2016 summit in London, Pemsel told attendees that The Guardian is in the process oftesting anti-adblocking measures in "certain environments."

Newspapersare increasingly stepping up efforts to combat adblocking. In October of lastyear, German media group Axel Springer SE banned readers from using adblockers onthe website of its top-selling tabloid, Bild.A month later, Axel Springer said the move had led to a drop in the number ofreaders with ad blockers, from 23% per cent to a single-digit.

Theadblocking initiatives come at a difficult time for the traditional print mediaindustry, the demise of which has been well documented.

Accordingto figures from ZenithOptimedia, the newspaper industry's share of total adspend is expected to fall by 4%, to 11.9% - worth an estimated $68 billion -compared to a 38% growth in mobile ad spend, namely to a 12.4% market share ofoverall ad spending; a $71 billion valuation in 2016.

Forinstance, in the past decade, the FinancialTimes has gone from raking in 75% of its fortunes from print advertising tochurning out digital content worth more than 50% of its total output. Othershave been less fortunate. In March this year, British newspaper The Independent published its finalprint edition after 30 years.

Thesteady decline in print advertising has left traditional media scrambling tomonetize digital readers. A PricewaterhouseCoopers forecaststated that after falling 0.9% in 2014, total newspaper revenues will continueto decline to 2019.

Butdigital and even mobile-first publications have not been exempt from theindustry's malaise, signaling tough times across the entire news industry.Among the publications that failed to keep their lights on in 2015 was themobile news app Circa News, which was put on "indefinitehiatus" after four years.

Pemselpointed out it will be difficult to forecast revenues. However, approximately90% of The Guardian's new users arenow on mobile and its video segment is up 250% year on year. It is alsoincreasingly dabbling with off-platform distribution methods such as 's InstantArticles.

Nevertheless,"we are still invested in print," Pemsel stressed. "I see usworking in a very progressive, unbelievably disruptive digital world whereprint plays its role but it's just part of multiple places in where wedistribute our content."

AlexDeGroote, on the other hand, is more skeptical. Given the high cost ofproduction relative to the paper's "vicious downward spiral in circulation,"the London-based Peel Hunt analyst predicts that The Guardian will "switch off" print within the next 18months.

Heestimated that The Guardian's dailycirculation is around 160,000, compared to nearly double that amount, around300,000, five years ago. He added that TheIndependent had a similar downward trajectory. To put that in context,Daily Mail has 1.6 million copy salesa day, down roughly 25% from more than two million in 2008.

Oneof the main challenges that traditional print media are facing comes fromdigital players, which allow users to share written words at low cost, so withthe proliferation in free and user-generated content on the internet, the"value of good information" has never been higher, according toDeGroote.

Pemselrecognized that, too. He revealed that TheGuardian, which he described as a "business going through [a] completetransformation," is working toward a tiered model in which it super-servesa paying audience, rather than introducing an outright paywall. While the mediagroup needs to diversify from advertising, he stressed a paywall would hurt itsglobal reach and influence.

DeGrootewelcomes the move, saying that a tiered online subscription - a finite amountof content at a given cost, whereby the more you consume, the more you pay -would make the most sense.

"[Digital]subscriptions were resisted by a lot of publishers but we now need to acceptthat there is a cost to providing quality journalism," he concluded.