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.

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.