Wednesday, April 16, 2014

le Monde is facing too many challenges

It is not an easy job to be at the helm of le Monde. The  national newspaper which is probably the most prestigious French daily is bleeding and looking for new recipes for growth.

Its circulation has been steadily going down for the last ten years and is now at 275000 copies, a far cry from the distant times when it reached four hundred thousands. However, its colleagues, including le Figaro, do not fare  much better.

Its digital audience is not bad, with 2 millions readers a day, according to Audipresse One and has a fairly large foreign readership.

It is not a surprise if the newspaper was in the red in 2013 by 6 millions euros in spite of a profitable digital branch, le Monde Interactif and 2014 doesn't look any better with declining print circulation and lower advertising income.

And yet, le Monde has strong assets.  Its image is good not only in France but also abroad and its potential for digital development is strong but it needs a strategy. Two big challenges face its owners and its management. One is a decision to move to morning publishing instead of an afternoon distribution which is inefficient and costly. In that case, le Monde should close its printing unit in Ivry and get printed either at le Figaro or by some other Paris unit and get partially printed with regional newspapers out of Paris. This solution would allow the daily to extend a home delivery service through the regional press. The other challenge is the digital policy. It seems obvious that the Monde should adopt the paywall and follow the example of the New York Times even at the risk of losing some advertising income. The future financing of the newspaper is at stake as digital income must increase steadily to make for the vanishing ads.

These decisions are urgent but it is hard to tell what the owners of le Monde who have just bought the newsmagazine Nouvel Observateur intend to do. Are they willing to devote enough time and money to the daily or do they push for building a huge press group including Libération which another risky challenge? An open question and no answer yet.

Monday, April 14, 2014

The press economic challenge: are there answers?

The results of Audience One, published last week, were quite a shock to media observers. The two publications with the largest audience, print plus web were Femme Actuelle, a women's weekly and 20 Minutes, a daily free sheet. Prestigious national newspapers, such as le Monde and le Figaro were far behind.

And yet, 20 Minutes lost money in 2013 and Femme Actuelle is not as prosperous as it used to be ten years ago.

We face once again the quandary of the press in Western countries: how is it possible to get enough money from growing web audiences. There is an important population, close to ten millions people in a country like France, which is  eager for news and willing to pay, up to a point. However, nobody has been able to reproduce the magic system that made the old press so prosperous for one century i.e. selling price plus advertising.  For the moment public and private subsidies make for the lacking resources. In France, government subsidies amount to 10% of the press income. In the US, private foundations and wealthy patrons are providing the equivalent. Everybody knows the story of Pierre Omidyar who is putting 250 millions dollars in information websites.

One sees the same process with local news. In the US, wealthy businessmen start buying regional newspapers which they hope to improve with thriving websites. In France, the same process will probably happen.Investing in local news is risky gamble but it should pay off in the long term. People want to know what happens in their neighbourhood and they will subscribe if the service is cheap and efficient.

Monday, March 31, 2014

More on local news

The collection of local news is an expensive process. Until now, it was financed by the print papers, thanks to sales and a very profitable advertising policy. In 2014, things look a bit different. The overall cost is the same, about 600 millions euros for France and for salaries only but the  press income is going down as   classified ads are massively moving to Internet.

Sure, a website covering current affairs for a 800 000 people metropolis should be fairly cheap. No print and no delivery charges. Just salaries for 4 journalists, 10 local correspondents a sales manager  and 2 technicians plus overhead expenses. An annual budget of 700 000 euros should be enough to provide a permanent flow of texts and videos.

However, it could be difficult to finance it. The audience would be limited because of so many specialized sites such as Allo Cine that offer useful information for free. That means that a paywall would not work and that advertising is risky.

So what could be the solution? Most likely an enlargement of the offer with connections to other websites devoted to sports, fooding, entertainment. It would mean the slow building up of a loyal public and a network of shops, sporting clubs, various associations, each willing to pay a small fee to be registered and promoted.

It would be a fairly long process but there is probably no other opportunity to succeed on the local market.

Thursday, March 27, 2014

local news at the digital age

Are local news manageable in the new digital age? This is a big question for American and French regional newspapers. As far as national and foreign news are concerned, the answer is getting quite clear. It is now possible to launch websites that attract a huge public and can be profitable. The last Pew report on news states very clearly that after ten years of search and failures, things are starting to move in the right direction. In France, the success of Mediapart shows that we can have our own Politico.

For local news, there is no proper issue. The fact is that regional dailies built their success on an efficient mix-up of information and useful data on day to day life. 30 years ago, you had to buy the paper to know what was happening in cinemas, theatres, concert halls, shopping centres and also the sporting life. To day, you just need to connect for free to the right website, such as Allo Cine or the city hall site and you get from home every kind of information you need to survive in the big city.

In fact, the global newspaper is slowly vanishing. Now, you have a local news press agency that provides you with pieces of information you don't always need and current life websites managed by people who are not journalists. What could happen next? We'll discuss it in another blog.

Friday, March 21, 2014

Newspapers sell their digital sites

Last January, the Guardian sold for 985 millions dollars its very profitable website of cars digital sales. This month, the various American press groups that own are putting it on sale for 3 billions dollars. It means, for instance, that Gannett, the largest American newspapers group will reap 810 millions and Mc Clatchy, 750 millions.

Any expert of the news industry will wonder why ailing newspapers facing a permanent reduction of sales and advertising and bound to move, as quickly as possible into the digital age, are selling their more profitable assets, losing copious dividends and ad market advantages.

To this obvious question, the Guardian states that it intends to invest on a grand scale into the digital services of the daily, hoping in a few years to turn its digital branch into a profitable venture.

It seems that the American groups expect to ease their pulling out of the print industry by using this huge amount of cash to buy into television networks. This way, Gannett and Tribune could drop their dailies and become prosperous TV and Internet  businesses. The case of Mc Clatchy is a bit different as they seek to get rid of their debts, maybe to sell later on their print activities.

What does it mean? The most likely answer is that the owners of the press industry, following the example of the Graham family, are giving up on their print business and moving to more promising fields, Internet but also television which is still highly profitable if well managed.

At the same time, many young people, helped by wealthy sponsors try to figure out the future of the news industry. They are the Gannett and Tribune of to morrow.

Tuesday, March 4, 2014

digital journalism new trends, new hopes

In an important post on the Columbia Journalism Review web site, Dean Starkman stresses the new trends of digital journalism. He shows that during the last two years things have clarified and some heated debates have been definitely closed.

One major debate was about paywall or not paywall.  Now, it appears clearly that the traditional media have to accept paywalls. The NY Times, the WSJ, the Financial Times have very successfully moved in that direction. Although it is not a panacea, it makes for  a growing share of the losses of the print press. The only exception is the Guardian but its offer on tablets is already under a paywall and there are more and more people who use tablets.

However, people agree to pay if they get quality news and long reporting. Recent experience has shown that the public doesn't buy anymore hazardous informations spread by the social networks. The pure players can do it and some are very successful like Huffington Post or Buzzfeed but they too try to be more professional and pick up talented journalists to improve their offer. The print press is sick but it is still a model. After all, it seems that quality journalism has a future

What is really worrying is the fate of local news collection. In the US, local newspapers and websites don't find their way and lose audience and money. It seems that the public is willing to pay for national and world affairs, for economic news and, maybe, sports but is not motivated on what's happening next door. This trend which can be spotted too in France means that other actors are entering the game: highly specialized sites, local government services. A big question: is there a future for independent local news collectors? By now, there is no answer.

Monday, February 24, 2014

Is the London Times a model for le Monde and le Figaro?

What happens to the pay digital service of the London Times? The Columbia Journalism Review offers an interesting assessment.

When Murdoch decided four years ago to move the digital service of the Times to a fully paid offer, a lot of people considered he was misguided. The common opinion, shared in France by le Figaro and le Monde, was that a successful offer on the web should combine a certain amount of free articles financed by advertising and a subscription for a more extensive coverage of the news. With its pay wall after 15 or 10 free articles, the NY Times made a slightly different offer.

And yet, the more recent figures show that Murdoch is about to succeed. In two years, the number of subscribers went up by 38%. Now, there are 153000 subscribers paying between 3 and 10 dollars a week. Paywall revenues amount now to 60 millions dollars which has greatly helped the Times to reduce its losses, from 120 millions in 2009 to 10 millions last year.

Also, very interesting is the fact that  digital subscribers spend a lot of time reading the daily: 40 mn against 44 mn for the print subscribers. It appears that, contrary to readers who have a free access, digital subscribers behave like the people who buy the print edition. This way, the Times can offer a total readership larger than four years ago.

Sure, the Times, with its hard paywall system doesn't get ad revenues but is it a real problem?
It is a well known fact that advertising on the web is lagging behind as there is such a deadly competition. It could be a safe bet for a newspaper to forget it and try to improve and enlarge in many ways the pay offer.

A lot of food for thought for quality newspapers like le Monde and le Figaro.