Monday, September 27, 2010

the value of classified

The announcement of the sale by Spir of 50% of to its partner, Schibsted, came as a surprise. It was even more so if one considers the amount of the sale: 200 million euros which means that the site of free ads founded 4 years ago, has a value of 400 millions. If you remember that the Parisien-Aujourd'hui en France, with a circulation of about 480 000 copies could be sold for 100 million, you realize that there is quite a premium on internet and classified ads. They are obvously more sexy than cumbersome newspapers which are too be printed by huge presses and carried all over the country.
However, a closer look at facts and figures makes a different impression. In his excellent newsletter, Frederic Filloux shows that the growth capacity of classified ads on Internet is still impressive. Moreover, there is little competition for free ads in France. Leboncoin can apply with great success the Scandinavian system of its sister site Bloket which combines a huge offer of free ads and a more limited but very profitable paid service for professionnals;
Still, there is another explanation for the buying by Schibsted. The Noewegians intend to set up a European group of classified web sites included in Schibsted Classified, a company due to be introduced in 2012 on London stock exchange. In that case, the soaring value of the shares could bring a tremendous profit for this very dynamic media group.
Journalists should be very happy that aging tycoons like Murdoch or Dassault are still willing to invest in old fashioned newspapers. On that point, see the comment of Jack Shafer in where he explains that the British press is lucky to get the subsidies of Murdoch for the failing Times and Sunday Times.

Thursday, September 16, 2010

Parisien. The Dassault solution

It is common knowledge that President Sarkozy will never let the Parisien fall into hostile hands. It is the reason why I never believed in a foreign solution. The fall of David Montgomery, chairman of the press group Mecom makes it even more unlikely. Montgomery has always been interested by French newspapers, considering probably that their poor management left a lot of opportunities for improvement. Now, he is gone and his successors will probably look elsewhere for quick profit.
Sarkozy has two friends willing to invest in newspapers, Bolloré and Dassault. It appears that Bolloré proved too stingy for the taste of the sellers, Amaury family. So, what about Dassault? He certainly has enough cash to buy the regional daily of Ile de France and its companion, the national Aujourd'hui en France. His team includes competent managers, headed by Francis Morel, who proved fairly efficient with le Figaro.
As for synergies, things look a bit awkward. The delivery network owned by le Parisien could prove useful for le Figaro in Ile de France but Figaro's printing unit is probably not big enough to produce two morning dailies. It means that the eventual buyer would have to keep Saint Ouen, the printing unit of le Parisien, an unwelcome prospect.
Still, Serge Dassault who wants to get back his job as mayor of Corbeil and intends to keep his position at the Senate has a strong incentive to own the regional newspaper. He only needs to offer a decent price to Amaury family. The sellers expected 200 million euros. It is said that Bolloré offered 50 million. Would a 100 million offer make the deal? We'll know pretty soon.

Monday, September 13, 2010

Can Google kill books

For the time beeing, the sales of books have not really suffered from the competition of the electronic delivery systems. In Europe as in America, the figures for 2009 don't show a sharp decrease. E-books are still a limited offer and, fortunately, piracy has not reached the scale of video or music.
Still, I would like to try to look forward. What will happen next year or, a bit further, lets say in 2015?
I believe one should draw a line between fiction and non fiction. As far as fiction is concerned, I don't think things will change dramatically. A paper book is easy to carry, easy to use. Electronic readers won't replace them so quickly and so easily.
Things look very different for non fiction. It is already a common practice to use smartphone applications or research systems like Google, to get for free or at a minimal cost, massive informations on every topic. Yes but people enjoy grasping a synthetic view through an exhaustive book. Is it true really? People don't like to waste their time, especially when they work outside of the literary field. They get used to Internet for their job or their studies. Why should they behave differently for their own leisures ?

Wednesday, September 8, 2010

Le Monde, le Parisien

As september goes on, so do the two big summer dossiers of le Monde and le Parisien. The 3 shareholders of le Monde are getting close to the final deal that should take place by October 15. Now they have a good look at the management of the daily and the best ways to improve it. It seems that Xavier Niel is getting involved in a process that would downsize the bloated printing unit and reduce drastically the overhead. And yet, there are many other items to look at: the delivery system, the advertising department which should perform better in a very competitive market and, last but not least, the Website whose minority partner is Lagardère. Hopefully and if the rights decisions are made on time, le Monde should break even in 2011. It would be a nice change after so many years of losses.
The fate of le Parisien is still in jeopardy. Nobody can doubt the will of Amaury family to sell. The big question is the price. Potential buyers, yes, there are some, are willing to look at the daily but reluctant to burden themselves with the printing unit of Saint Ouen. It seems obvious that the future owner will have to close it one day, an unpleasant prospect to say the least. It seems that negociations will go on for a while.

Friday, September 3, 2010

The choices of Jay Rosen

Jay Rosen, professor of journalism at NYU, delivered yesterday the master class at the school of journalism of Sciences Po.
His opening statement was both thoughtful and provocative:"The way you imagine the users of journalism means the way you are a useful journalist". Then he stressed the fact that we assist to a breaking up of the mass media with a shift in power. It is the end of mass audience and passive audience. People are connected to each other with all the systems of communication: blogs, podcasts, videos. Now everybody can use instruments which used, a few years ago, to belong only to the mass media.
Facing this new state of things, the journalist must play his part very carefully. He is aware that users know more than he does and that people who know a lot are able to publish on the Web. In fact, the journalist is an heightened kind of informed citizen. His task is to give people what they have no way to demand.
Professor Rosen is well aware that the young journalists must adjust to the ominous transition of traditional media facing the challenges of Internet. Answering a question, he admitted that the financial crisis of the newspaper industry is "an unsolved problem". Advertising is moving towards hundreds of web sites which are not involved in the business of information. Classified ads are delivered for free. Lacking money, newspapers are downsizing and get less informative. And yet, the job of journalism is necessary and exciting.
A lot more questions could be asked. We need to keep talking to Jay Rosen.

Thursday, September 2, 2010

The sale of Le Parisien

In a previous blog, I was wondering if a press mogul would be tempted by Le Parisien which Amaury put on sale last June. It seems that the new French media tycoon, Vincent Bolloré is tempted to move as he said recently in a Figaro interview. What could be his reasons? The synergy between his free sheets Direct Plus and the regional daily are not so obvious. The buying of the printing unit of Saint Ouen which is included in the deal is more a handicap than an asset. However, it is well known that Sarkozy has always followed closely the fate of Le Parisien. Has he pushed Bolloré to make an offer? It is likely. Nevertheless, the man from Britanny is a tough manager. He won't agree to pay the hardly profitable newspaper at an inflated rate. Lets say that his offer could be around 100 million euros, one half of Amaury expectations.
The true priority for Bolloré is the buying of Nice Matin which would help the development of his Riviera television. Groupe Hersant, the owner of the daily is pushed to sell by its bankers. We'll know more next week.