Industry members and analysts say promotions have softened the decline in Spanish newspaper circulation, which dropped 2 per cent in 2005 and is estimated to have fallen by the same amount last year. Spain is the only market in Europe, other than Ireland, where newspaper sales rose between 1996 and 2005, in Spain's case by 1.3 per cent.
Spanish newspapers carry promotions ranging from coupons for a cut-price DVD player to lotteries for cars and holidays, in an average of three out of every four issues. Two-thirds of promotions involve paying a supplement to the cover price and Deloitte, the consultancy, estimates they accounted for 344 million euros, or about 12 per cent, of the newspaper industry's revenues last year. But observers say there are signs of promotion fatigue, and warn the strategy cannot ward off the ravages of new media.
Prisa, publisher of leading newspaper El Pais, last month blamed the diminishing impact of promotions for a 5 per cent decline in circulation last year. El Pais maintains a steady stream of promotions and in November raffled a two-door
Mercedes every day and a Madrid apartment each Sunday.
"There has been a surfeit of promotion [across the industry], so it is less and less successful," said Iñaki Arechabaleta, director of print media at Vocento, Spain's largest newspaper group.
Promotions are not the only factor that has kept the digital media wolf from the door. Only one in five Spaniards is connected to the internet, compared with one in three Britons. Broadband penetration - at 12 connections per 100 inhabitants - is about half that of European leaders.
Strong economic growth has boosted newspaper advertising revenue, which rose 4.6 per cent in the first half of 2006 and is now close to 2000's record level of 1.7 billion euros, according to advertising watchdog Infoadex. Advertising revenues at El Pais rose 8 per cent last year, while those of its growing sports title AS were up 27.5 per cent.
The Spanish newspaper industry has a low base from which to fall, with 98 newspapers sold per 1,000 inhabitants - below the 100 that is the UN benchmark for developed countries.
"We are not losing so many readers for the simple reason we did not have as many to start with," says Luis Jimenez, director of Deloitte's European media practice.
With no tabloid market worth speaking of, freesheets are not stealing market share from paid titles so much as creating a complementary market, experts say.
Spain has arguably the most decentralised newspaper industry in Europe, with 140 titles. Catalonia-based La Vanguardia, the fifth largest-selling title, sells 200,000 copies, almost half as many as El Pais. "There is a broad tendency [in Spain] towards hyper-local news," says Xavier Moreno, editor of El Pais.
Regional titles are more insulated than national titles from advertising cycles, says Beatriz Puente, head of corporate development at Vocento. They are also less affected by the migration of classified advertisements to the internet. Classifieds represent 25 per cent of revenue at regional newspapers owned by the Vocento group, for example, compared with 40 per cent at national titles.
Analysts say it is only a matter of time before the internet eats heavily into newspaper sales. Broadband penetration is rising quickly - jumping 50 per cent in 2005 - thanks to a government drive to get Spaniards online, and competition between broadband providers.
Internet advertising - less than 2 per cent of the total - rose 28 per cent to 64 million euros in the first half of last year and is expected to double by 2008. Jimenez says: "The real challenge is what happens in the medium term. The internet risk is very high."
