Friday, April 17, 2015

Bollore and the great French media group

A few weeks ago, Vincent Bollore, chairman and main shareholder of Vivendi said that he wanted to build up a huge media group, the size of Bertelsman. Up to now his policy has not been very convincing. He has sold several important branches of Vivendi, including the telecom operator SFR and has pulled out of the biggest Polish TV channel. As far as digital activities are concerned, Vivendi has been lagging far behind Springer or Schibsted which are now the most notorious media operators on the Web in Europe.

What is striking is that France, which has a brilliant past in, owner of  media history, has not been able, these last 20 years to build up a credible strategy. Lagardere group, once a major world player has sold most of its magazines and has never been able to make it in digital and audiovisual activities. The newspapers Figaro, Monde, Ouest France are moving slowly, probably too slowly towards a digital future and the most promising start up are bought by American of German investors such as Springer owner of Aufeminin, Seloger and Carboat, three promising French ventures.

Still, Vivendi remains France's last hope to be a global player in the media world. The Guardian said recently that Bollore could buy the share of Murdoch in Sky, the giant British pay TV operator. If it worked it would be a late but stunning success.

Wednesday, March 25, 2015

The crisis of regional newspapers

The Marseille daily La Provence is about to let go 60 employees and raise by 10cents its price to prevent new losses. With a circulation of 110000 copies the newspaper is threatened to become irrelevant in Marseille conurbation whose population is up to 1 million people.

Its neighbour Nice Matin is not in a better shape. Its advertising and circulation are in free fall and it can ill afford to pay its furnishers and its social security fees. Its new owner, the employees association has no income and is desperately looking for investors.

Further North, the Bordeaux daily Sud Ouest has reached a precarious balance for 2014 but can hardly expect to pay back its heavy banking loans and advertising and circulation keep going down.

The other regional press groups have to face the same challenge of advertising and classified ads going down by 7% per year. They all raise their price which has a negative influence on sales. Why would people pay more and more for publications that provide less and less fresh news?

An expert on French press told me recently that within 10 years, only two press groups would survive, one of them beeing probably the Belgian Rossel who is interested in La Provence, Nice Matin and Sud Ouest.

And yet, people are always intrested by local news and services but there are many providers moving to fill the gap. The most notorious is Google which strikes deals with local business in many big cities, including Marseille to help them to promote themselves. Solocal, ex Pages Jaunes is following the same pattern and Facebook which is more and more interested in news will go the same way. Local pure players will have no choice but to deal with these powerful and wealthy giants.

Its obvious the regional landscape is going to change dramatically before 2025.

Monday, February 23, 2015

The freesheets from print to digital

When the first freesheets appeared in Scandinavia, in the 90' and spread all over Europe, including France, the UK and Spain, it seemed that the print industry had found a smart way to stop the falling audience of paying newspapers, a fall that started long before Internet.

At that time, it was explained that Metro or 20 Minutes reached an audience of young suburban people who considered traditional newspapers as expensive and elitists. The first audience figures showed something interesting was happening. People under 30 were really picking up and reading the printed stuff which was offered for free.

In 2015, things look quite different. Freesheets suffer the same diseases as the legacy media they hoped to replace. The tremendous success of smartphones means that travellers in the public transports consult freely their usual web connections and don't bother to read a paper, even if it is free. More and more, the consumption of news goes through the social networks, Google and telephones.
The advertisers have noticed. The ads that finance 100% of the budget of freesheets are massively moving towards Facebook or Google where they find a well connected and exciting audience. These days, most of the free newspapers are losing money.

There is a possible outcome, to drop the print and turn into a full digital service. It is a risky challenge. The only advantage of print is that it is very visible. When some American newspapers turned digital, they lost a great part of their readership because they were lost in the gigantic Internet world.

The other drawback is money. In France, a proper digital news service would cost about 15 millions euros. Can ads bring it when the competition is so fierce with popular sites that drain tens of millions of UV's? Some experts think that to survive, a news website must get at least a monthly 10 millions UVs. Foe the moment, only legacy medias websites from le Monde and le Figaro can reach that level.

It seems that the freesheets era is closing to the end but the battle for news on the Web goes on.

Wednesday, January 28, 2015

newspapers on sale

Newspapers are on sale everywhere and so are many magazines, all of them at bargain prices. Yesterday, Group Sud Ouest finalized the sale of Midi Libre to La Depeche for a sum which should not exceed 20 millions euros, a far cry from its buying price ten years ago. The same with Express sold by Roularta to Drahi the new telecm owner for about 10 millions euros.

And now, there is the rumour that the New York Times, the most prestigious American daily could be bought by Bloomberg. The price would certainly be much higher than the 250 millions dollars fixed for the sale of the Washington Post and could amount to more than 1 billion dollars. Still, it would be a revolution in the American media world as the grey lady is the last major newspaper to belong to a family.

What does it mean? First that there are still people who are interested in legacy media and willing to put money to gain what they consider is prestige and influence. Then there is the fact that prices have gone down dramatically as the examples of the Post, l'Obs, sold for 5 millions euros or Express show. So why not try a new adventure and merge digital and print media as Bloomberg would obviously like to do with the Times.

As usual, the battle for the media is a battle of moguls. But now they are using the money they acquired in digital affairs. Blommberg will face Bezos, Drahi will attack Niel.

And yet, I wonder. Are the future news giants to come from the former legacy media, boosted by digital money? It is not sure. Audacious pure players are all over the place and growing very very quickly.

Monday, December 29, 2014

The French legacy media in 2015

In a recent article, the New York Times provides an extensive list of the American media executives who will be on a "hot seat" in 2015. The same could be said of the French legacy media.

Let us start with group Express. Its flagship publication, the newsmagazine Express has been in trouble for 2 years with a sharp fall in advertising and a slow decline of circulation. Many observers consider that the era of newsmagazines is over in France as in Germany or the US and that Express has no future. The group's owner, Rick de Nolf faces the unhappy dilemma of keeping the ailing publication or selling it at a discount rate. He bought the group 10 years ago for 220 millions € and according to bankers, its present value is around 50 millions.

The two other newsmagazines, Le Point and l'Obs are not in a much better shape. They see their advertising income going South and suffer from the competition of the websites which are very dynamic indeed. It seems that only one of them can survive and 2015 will be the year of reckoning.

Dailies do not fare much better. Once again, le Monde will be in the red. Its selling price will go up to 2.20€ which will mean a new decrease of its circulation combined with low expectations in advertising. And yet, the print makes 80% of the income of the newspaper. Le Monde should definitely improve its marketing policy to boost its print and digital subscriptions.

Regional newspapers will probably face another year of decline of advertising and classified at a pace of 8% a year. In 2015, attention will focus on Sud Ouest which is trying to sell its sister daily Midi Libre and has to repay a loan to its bankers. It is obvious that new partners will have to be found, very soon.

Are digital media ready to take over? There again, the picture is mixed. Apart from le Monde and le Figaro, the legacy media websites are not profitable. Pure players are also lagging behind their Anglo-Saxon competitors, Mediapart being the only success story. By the end of this coming year, Politico will open a site in Brussels, followed by the Guardian and more and more French people read English.

However, the most interesting challenge of 2015 will be the digital coverage of local news. There, new opportunities should be seized.

Monday, December 1, 2014

local news on the Web

I have mentioned many times the hard fact that local news are not a web favorite. Their readership is sparse, their sponsors are few or depend too much on local government. However, the fate of democracy in Europe or in the US is highly dependant on a comprehensive coverage of local politics and economic challenges.

In France, no regional newspaper, whether it is Ouest France, Sud Ouest or Voix du Nord has been able to launch a credible alternative to the print. It raises a big question: are legacy media better placed to innovate on the Web? They still raise enough money through the print to finance a big newsroom and a network of local correspondants but it won't last. Advertising is running away and will never come back. Permanent losses are the future.

So what about a pure player? It is possible, as long as it covers a huge territory, lets say South East or Britanny. In that case it should have a small team of journalists working on long papers dealing with the major dossiers of the region and a powerful network of corresponadnats able to cover every part of the zone.

What about the public? It should be a population of motivated internauts, willing to pay a monthly subscription, provided that they are permanently informed on what is happening in the neighbourhood. Forget the daily publication of a bundle of news. It is not what they look for. They use more and more smartphones, very good for breaking news, not so easy for long papers which are less urgent and can be read once a week on a tablet or a computer.

Does this population exist? I believe so but it requires fast and valuable news. There is plenty of it in every city. You just need to look for it and deliver it immediately. Then people will agree to pay. 

Tuesday, November 25, 2014

The future of legacy media

It appears that year 2014 is a year of new assessments, a cross road where the legacy and new media followed new paths that will remain the same for years to come.

Two major processes became obvious these last few months.
First, the triumph of news websites which after many unsuccessful attempts seem to find the proper recipes to drag audiences et finance their efforts, as long as they deal with national and international pieces of information. However, their shape is very different from the usual print press. They collect data spread all other the place, they rely heavily, too heavily maybe, on Google and social networks such as Facebook which is slowly turning into a new and very powerful media. they mix up more and more text and video, blurring the lines between traditional media, press, radio and TV.

Then, the legacy media keep drowning, losing for ever advertising income and their readership. The success of their Web services is uneven. Some seem to make it like the NY Times, le Monde or le Figaro. Others, dailies or magazines are trailing behind and, anyway, none of them is able to finance properly a strong investigation team. If and when they vanish, what will replace them?

The big question, I will treat next time in this blog is the future of information. What do people want? What are they willing to pay? What level of information is necessary in a democratic society? Keep tuned.