Attracting more readers and increasing advertising revenue are major challenges for the newspaper industry, says the first report by the Publishing Market Watch. Supported by the European Commission Enterprise Directorate-General, this 12-month project is analysing the competitiveness of the European publishing industry. The new report includes exhaustive statistical analysis of the sector and a discussion of key business issues and trends. Amongst its findings, the report confirms that circulation of newspapers is either static or falling in most European Union Member States, while other media are growing in reach. European newspapers still enjoy the largest circulation in the world, only outranked by papers in Japan. Despite the decline in absolute advertising revenues, European newspapers are maintaining or increasing their share of total advertising revenue. The project's next reports will be a special paper on Corporate Social Responsibility in the publishing sector, due in April 2004, followed a month later by one on the book industry in the EU. One of four sector reports, the European newspaper industry study is available on the Europa website and on the site of Publishing Market Watch.