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.

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.