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.

Friday, July 3, 2015

the uncertain future of legacy media


The most recent trends of the digital revolutions are no comfort for the embattled legacy media.

What do we see?

A continuing decrease of advertising confirmed by the first quarter figures of the New York Times and the results of the French newspapers. Advertising is going down by 7% a year and aims directly at the bottom.

A parallel fall of paper circulation, by 2 or 3% a year which seems also an endless process.

A stabilization of the digital subscribers Which is very worrying for the NYT as they cannot expect to raise their digital subscription rates in a very competitive market.

Close to 50% of users that rely on smartphones as the hopes on the tablets have not been fulfilled by far.

The growing power of the social networks and mainly Facebook which are more and more the conduit for news. is appears that the main world newspapers will have to rely on the Facebook delivery system to keep working.

Lets hope for the best.

Monday, June 8, 2015

Newspapers a tycoon's weapon


Are print media and specially newspapers a matter of fun and influence for ambitious tycoons?
After so many sales of dailies in Europe and the US, it is worth thinking a bit about the outcome of old fashioned legacy media.

In France, the last transaction, the buying for about 80 millions euros of le Parisien by Bernard Arnaud, the very wealthy owner of Loreal needs some explanations.

It is obvious that Arnaud is not looking for a profitable business. le Parisien has lost money for 4 years and its circulation is dropping by 7% a year. Moreover, threre are very few synergies with Les Echos, the French equivalent of the FT which belongs already to the tycoon.

However le Parisien is a fairly popular daily based in Paris region where it still sells about 250000 copies. No politician from this part of France can afford to forget its role and influence. It is easy to think that Nicolas Bazire, the very politically minded deputy of Arnaud could wish to add this political tool to his master's empire.

So this operation is better understood if you consider the background of two very important votes which aregetting close: regional elections in December 2015 and presidential elections in 2017.
Still, nobody can assess the part played by socil networks to shape public opinions. It is still flattering to own some big dailies but is it useful in this digital century?

Monday, May 18, 2015

Le monde The new crisis

The daily newspaper le Monde is definitely the flagship publication of France. For 70 years, it has delivered powerful messages on French and international affairs and is the regular partner of European papers such as The Guardian or El Pais or Der Spiegel. Its digital edition is widely read with 8 millions UV's.

However this prestigious media has not managed to fix properly its ownership. 5 years ago, the company which was nearly bankrupt went through a major upheaval. The Journalists Association which owned a majority of its capital  had to let in three new shareholders, three very wealthy businessmen ready to pour 100 millions euros in the ailing daily.

The last 5 years have been rather profitable, with a fairly efficient management. le Monde has developed its digital products, launched a successful week end magazine and closed its costly printing unit.

Still, the shareholders, Pierre Berge, Xavier Niel and Matthieu Pigasse have never been able to build up a proper partnership with the editorial staff or define a long term strategy. A lot was expected from Niel, a telecom tycoon, the best equivalent of Jeff Bezos in France. Bezos has played a major part in the reorganization of the Washington Post. Niel has done very little as he seems to be wholly absorbed by the development of Free, his telecom company. Moreover, the chairman of the board, Pierre Berge, the former partner of Saint Laurent has mostly devoted his energy to criticize the content of the paper, behaving more like a bitter subscriber than as a  proper boss;

The growing split between Berge and Niel has prevented them to sort out the government of Le Monde. The CEO, Louis Dreyfus is a manager, the editor in chief is a journalist supposedly in charge of the content. As it was noted by Natalie Nougayrede, a former editor in chief, now working for the Guardian, that team has never worked properly. After the forced departure of Nougayrede, in May 2014, the interim editor, Gilles Van Kote has not been agreed by the owners for the permanent job. They pushed Van Kote's deputy, Jerome Fenoglio, without the agreement of the journalists. The result of this awkward manoeuvers is that, now, Le Monde has no publisher and the owners are at odds with the newsroom.

Yet a solution has to be found quickly. The newsroom needs a boss and the company must have a strategic project to cope with the digital revolution.

Monday, April 27, 2015

Newspapers the new digital challenges


The digital landscape moves on at a terrific speed. What seemed obvious two years ago for newspapers editors does not work anymore to day. Here are some tips on 2015 situation.

The major role of social networks. For a long time, it made common sense that the homepage of news websites was all important. Journalists and tehnicians devoted a lot of time and thought to their improvement. It is not true anymore. Now, more of 50% of users access to information through the social networks and mostly Facebook. The Web giant is discussing with the N Y Times to g provide directly the news of the Grey Lady. Others will follow in the US and in Europe. Facebook could become the main news provider without hiring any journalist.

The dominance of smartphones. When the tablet was launched by Apple, five years ago all news editors were convinced they had found the magic formula to offer their content in a user friendly device. Paid subscription to newspapers read on I Pad was the solution. To day, it appears that the smartphone has won. A great majority of readers under 40 prefer to browse on the small screen of their phones , so light and easy to carry. Once again, Facebook has understood earlier what was happening and attracted most of the readership and advertising.

The success of paywalls. News websites have thought hard and much too long to attract ads. It appears now that contrary to what made legacy media so profitable a long time ago, advertising will play a minor part in the financing of news and for two reasons. First, Google and the social networks attract most of the cash through their gigantic audiences. Then the small screens of smartphones are not attractive to advertising. The main anglo saxon media, the NY Times, the FT, the WSJ have built up a profitable subscription system with big figures, 900000 subscribers for the NYT, 800000 for the two others.  For getting a quality news service, people will have to pay.

Last but not least, pure players are offering successful alternatives to legacy media websites. Think of Huffington Post, Buzzfeed, Vice, Quartz and also Politico. In France, Mediapart is thriving. Ther will be other players in a crowded field. The battle for information is not over.

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.