Tuesday, November 17, 2015

The Washington Post A success story

On October and for the first time, the digital audience of the Washington Post was larger than the NY Times. It is an impressive success for the gray lady is a toughcompetitor and has been active and dynamic for many years in the digital field. However, its results are mixed. The third quarter figures for 2015 showed that the NYT could not stop the fall of ads in its print edition and in spite of an audience of 1 million subscribers, its digital site cannot make for the losses in print advertising. Also, the Facebook offer of advanced articles that was supposed to provide new ad incomes for the newspapers does not work as well as it was supposed to do. It seems to cannibalize the audience of the legacy media websites without carrying much new profit.

As far as the Washpost is concerned, it appears that the sale to Jeff Bezos was a smart move from the Graham family. Contrary to what many people, including myself feared, the Amazon owner has played his part very successfully. He has stopped the flow of departures from the newsroom and hired a huge team of technicians to improve the web operations. He has also approved a very aggressive marketing policy, offering very chap subscription rates to the digital users in order to attract a large new population.

Still, these two major newspapers face now another challenge which has been met already by several pure players like the Huffington Post, Politico or Buzzfeed: how to keep growing. The only way is to look to Europe and Asia wher there is a large English speaking population. One can bet that Bezos will work at it thanks to his world Amazon network.

A last question. What is doing France's Bezos, i.e. Niel coowner of le Monde? it's time he works on the newspaper's digital strategy.

Monday, October 5, 2015

Regional newspapers the fall season

Last week, minority shareholders of the  regional daily NRCO based in the center of France announced they were willing to sell 25% of the daily's capital. Press observers wondered aloud who would be foolish enough to buy.
Many newspapers are or could be on sale. It is the case of Sud Ouest, number 2 of the regional press whose owners are trying to find a way out without losing too much. Sud Ouest group was valued 300 millions euros, 10 years ago. Now it would be around 60 millions.

Nice Matin, the once prosperous Riviera daily is deep into financial trouble. It is owned presently by its employees but it is obvious they will have to rely very soon on a local investor.

On the eastern part of France the many dailies belong to a bank, Crédit Mutuel. Their circulation is droping fast and they move deep in the red. The aging chairman of the bank, Michel Lucas or his successor will have to sell soon but, once again, who could buy?

One group seems to be willing to reorganize this devastated field, it is the Belgian Rossel which owns already Voix du Nord and several publications in the East of France. It has however to find a proper financing not only to buy in but also to buy out the redundant employees, mostly printers who are less and less necessary in the digital age.

As I have explained many times in this blog, US local press does not offer a remedy to the decline of the regional dailies. On the other side of the Atlantic, things don't go well. One has to think very thoroughly about what users consider is valuable in local news.

Digital news service needs subscribers

A hard lesson learnt these last few years by the digital news operatives is that advertising is not the solution to finance an ambitious news service. This is why, Facebook offer of advanced articles from legacy media is well received by powerful newspapers such as the NYT or the Guardian who prefer to share advertising with the huge social network rather than trying a hopeless competition with it.

Still, there is nothing better than a loyal population of subscribers. To attract them, many media have tried a counter rule. Once you have read 10 articles during the month, you must subscribe if you want to read more. The NYT, the New Yorker or, in France, le Monde or le Figaro have used this system with some success.

However, the Finacial Times is working on a new kind of offer: if you want to try the FT, you can subscribe for one month, for 1 euro and then, if you re convinced with the quality, you will subscribe for the year, at a normal rate. The Washnington Post is going the same way with an offer of 19.99 dollars for the first year.

The FT considers that it is important to keep a readership  for the full publication and not for scattered articles you can also get on Twitter or Facebook. It is an intersting effort to justify the existence of a proper media, with its various chronicles while the users tend to pick up pieces of news all over the Web. The last figures show that the FT strategy works but one must never forget that people are willing to pay only for top quality. The news digital services are under tough darwinian laws.

Friday, September 11, 2015

digital news the challenge of delivery

The digital revolution moves so quickly that it is sometime difficult to assess the new trends.

Still one thing is getting obvious: the news websites depend more and more on the social media. This unexpected change forces powerful newspapers like the New York Times to reorganize completely their delivery policy.

What happens is that the way people in the US and in Europe consume news is chnaging dramatically. Now, close to 50% of the users rely on mobiles and mostly smartphones, much more popular than the tablets.

Also about half of the readership comes from the social media and usually, Facebook. The homepage of newspapers websites is not popular anymore. So, it was not a big surprise to see the NYT strike a deal with Facebook for an Instant article delivery. Many American and British publications are following.

In France, the same process is coming with Les Echos as a pioneer but many others willing to go for it to save their readership.

A big question is whether Facebook and some others will gain a kind of control of the medias. Will they practice some censorship on pieces of news they won't like? We 'll go back soon to this very crucial matter.

Wednesday, August 12, 2015

The fragile model of the New York Times

Ken Doctor is one of the best American experts on newspapers. In his last blog, he comments the figures of the New York Times  for the first half of 2015. They are both a source of comfort and worry. True, the Gray Lady has reached the impressive figure of 1 million digital subscribers, including 1000000 from non US countries. True also, these subscriptions bring 185 millions dollars a year, a figure close to the cost of the newsroom which amounts to 200 millions.

However, it could be too late, too little. Print advertising keeps going down at a frightening speed: minus 12.8% for the second quarter. The digital ads went up by 14.2 but the global figure is still -5.5.
The print circulation keeps going down too. 10 years ago, the print sales were 1.5 million. Today, they are 650000. Admitedly, if you add up the million digital subscribers, you get the same global number as 10 years ago but the daily is far less profitable.

One of the main reasons for this fall of net income is that digital publication has a heavy cost. The NYT must hire a growing population of computer and Internet experts and lauch new experiments that are expensive and not always successful like NYT Now. Moreover, the potential for new subscribers is limited, unless the Gray Lady chases more foreign customers, a process which is not cheap either.

The lesson one can draw is that quality and good journalism have a cost but it pays with always reluctant subscribers  and also, one must rely more and more on digital tools which are hard to find and very, very expensive. Still for the main Western newspapers, there is no choice. They must move on or be irrelevant and disappear.

Friday, July 31, 2015

Drahi's media Empire.Too big to win

In hardly 18 months, Patrick Drahi, the French-Israelian tycoon who built a powerful telecom business and started an international Israeli TV channel, has collected a large media group in France. He started with the daily Libération, then, he bought Express group, including the newsmagazine Express, and the successful monthly l'Etudiant. He announced on July 28, a partnership with another tycoon, Alain Weill owner of the all news BFMTV and the prosperous radio RMC. Thanks to this union the two ambitous managers will be present in print, television, radio and, of course, the Web.

Many observers wonder. Drahi has heavily borrowed to buy the cable network Numericable and the huge telecom operator, SFR. He has also acquired a huge cable company in the US. His debts amount to about 30 billions dollar while his net income is probably lower than 1 billion.

For the moment interst rates are very low and investment funds are desperately looking for ways to use their abundant liquidities. But is is it going to last? Nobody a bit serious can believe that.

In things turn to the worse, the hardly profitable media group won't be a very attractive prey to avid creditors. If something is obvious, it is that Drahi and his team have no strategy to improve an ailing industry. Express is downspiralling in sales and advertising, Libération has no future and BFMV has to fight in the very crowded field of all news channels and dynamic social networks that belong to American investors with deep pockets. for the moment the group executives buy out their best journalists and talk about new acquisitions.

So Is Mr Drahi to follow the sad exemple of Jean Marie Messier the powerful media mogul who fell in the trap and vanished from the scene? Lets wait until...2016.

Monday, July 20, 2015

Schibsted digital strategy

Most observers agree on the fact that the Norwegian media group Schibsted  has followed these last 20 years an efficient and clever strategy. The result can be read today. The Norwegians are one of the most profitable and promising groups in Europe.

While they kept their various newspapers in Norway and Sweden, in spite of the fact they keep losing readership and advertising, they started very early to develop a huge and proseperous activity in classified ads on the web. Their flagship company which is in France, Leboncoin, turns up more than 30% of the total income of the group and they have launched classified ads branches in 24 countries. At the same time, they have given up their investments in 20 Minutes, a free sheet that never made it in France and Spain.

Now, it appears that the future of Schibsted lies with a world network of digital ads while their news activities are slowly falling into obsolescence.

if you look at another very successful media operator, the German Springer, you see the same process. Springer keeps its old newspapers, Bild which has still a circulation of 2 millions copies and the more high brow Die Welt. However, its digital department with prosperous websites on housing, wemen and classifieds is turning over most of the income. In a few years , Springer executives will have to find a solution for their ailing dailies and maybe build up a digital only news service which will be good for their image if not for their finance.

Now we wait for the second quaterly results of the New York Times, a news only company which is still fighting a uphill battle.