MANAGEMENT REPORT
I. FUNDAMENTALS OF THE COMPANY
The purpose of the company is the collection, processing, and distribution of news, images, audio, graphics, and videos of all kinds. To this end, a close-knit network of editorial offices and correspondents’ bureaus in Germany and around the world guarantees the company’s own news gathering, that is impartial and independent of ideologies, economic and financial groups or governments. This is stipulated in the articles of association of dpa Deutsche Presse-Agentur GmbH.
dpa supplies all types of media with this material: newspapers, magazines, radio stations and online services. Institutions, organisations, and companies are also among the customers of Germany’s largest news agency and represent important sources of revenue, alongside the media.
With its services, the company operates mainly in Germany. The approximately 170 shareholders of dpa are also drawn from the domestic customer base. In addition, dpa services are offered and distributed in more than 100 countries, both in German as well as in Arabic, English, Spanish, French, Serbian, and Russian. In this way, dpa helps to disseminate German topics and the German perspective abroad, as well as promote the important values of press freedom and independence.
1. Overall economic and sector-related conditions
The consequences of the war in Ukraine as well as the increases in energy prices and the rising cost of living shaped the overall economic situation in Germany in 2022. The average inflation rate for the year was 7.9%. Despite this, the economy as a whole held its own. According to the Federal Statistical Office (Destatis), for example, price-adjusted gross domestic product increased by 1.9% year-on-year. The services sector in particular benefited from the elimination of numerous restrictions imposed during the coronavirus pandemic. Foreign trade had a dampening effect on the economy as a whole. While 3.2% more goods and services were exported, imports increased by 6.7%. The number of people in employment grew by 1.3% in 2022. By contrast, the information and communications sector showed a positive trend for the media industry as a whole, with 3.6% growth in gross value added. Nevertheless, the traditional daily newspaper industry continues to struggle with the digital transformation.
According to the Arbeitsgemeinschaft Media-Analyse (agma), half of the people in Germany still read a newspaper every day, but the overall reach also saw a decline in 2022. Newspapers reached a total of 35.4 million people over the age of 14, which corresponds to a readership of 50.1% of the German-speaking population (2021: 35.6 million, 50.4%). The medium with the greatest reach and a slight increase remains the regional subscription newspaper with 29.1 million readers (compared to 29.0 million in the previous year). The national subscription newspapers show somewhat more significant growth. In 2022, 3.9 million people consumed this media genre daily (2021: 3.6 million). By contrast, the figures for newsstand newspapers continued to decline in 2022. The papers were read daily by 8.2 million people (2021: 8.7 million).
While print circulations fell noticeably in 2022, e-papers and paid content offerings again became increasingly popular last year, according to the German Audit Bureau of Circulation (IVW). A major reason for the decline in newsstand sales was the strong rate of inflation. In addition, two papers, Kurier am Sonntag and Neues Deutschland, stopped print publications entirely. Overall, sales of electronic daily newspapers increased by around 5% year-on-year in the fourth quarter of 2022 to 2.15 million copies sold (2021: 2.06 million copies). A significantly larger increase could be seen in the sales of e-paper editions of weekly newspapers. Here, sales figures increased by almost 50%. Instead of 0.29 million copies, 0.43 million copies were sold in the final quarter of 2022. The e-papers of the general interest press also recorded a staggering increase of 35%. In terms of digital subscriptions, many publishing offerings sent positive signals to the market over the course of the year. For example, WELT and also Madsack Mediengruppe report that they have exceeded the 200,000 subscriptions mark in 2022.
Even though the digital market is encouraging for the future, printed daily newspapers continue to face a sharp decline in circulation. In the fourth quarter of 2022, 9.41% fewer newspapers were sold than in the same quarter of the previous year. The general interest press is also struggling with a significant decline in circulation. Only the circulation figures for weekly newspapers showed a slight increase. They were able to increase their paid circulation by 2.46% compared with the previous year.
The industry is unanimous: The future of journalism lies in digital. Figures from the ARD and ZDF Online Study 2022 back this up. Eight in 10 people in Germany use the Internet every day, whether for videos, media libraries, news, music streaming, podcasts, social media or other formats. This is also reflected in media consumption. For example, 72% of people living in Germany now use the Internet for this purpose. 51% watch video content online every day, 42% listen to audio content. Public broadcaster’s media libraries have also become firmly established when it comes to media consumption in Germany. ARD and ZDF report record figures. At 52% each, they reach more than half the population. And 22% regularly access the programmes in both media libraries.
Publishers see their future business success in digital offerings. According to the joint study “Trends in the Newspaper Industry 2023” by the German Newspaper Publishers and Digital Publishers Association (BDZV) and the management consultancy Schickler, the highest priority here is the conversion of print to digital subscriptions. The e-paper, which conveys the character of a self-contained newspaper, has a higher overall value among customers than online paywalls. Paid content models, on the other hand, are preferably used to acquire new customers.