Friday, December 27, 2013

Media Winners and Losers

 2013 was only one of the first years of major upheavals which means that in 10 years, the media landscape will have very little in common with to day's world.

The winners this year are the more value added websites. Some are connected to newspapers such as the New York Times whose paying wall is a tremendous success thanks to a comprehensive marketing policy and a top quality newsroom with 1000 journalists. Others like Politico, Quartz or Mediapart in France are pure players carrying much looked for information.

Some sites are not looking for the best quality but their offer is attractive to many internaut. The best example is Buzzfeed which is spreading from the US all over Europe.

Among the many social networks, a mention for Twitter, easy to use, more discreet than Facebook and a good pick for the journalists.

The family of losers is, unfortunately growing. It started five years ago with the daily newspapers losing both circulation and advertising and downsizing permanently. Their future seems uncertain as their digital business is not thriving in a very competitive world. In France, le Monde is probably the only daily which can build up a prosperous website.

Now, it's the turn of the newsmagazines, a formula which is not user-friendly anymore. In the US Time hardly manages to survive. In Germany, Der Spiegel is in bad shape. In France, only two magazines will live out of four while weekly supplements of the dailies grow every year.

The rest of the magazines is still managing but not for very long. Some of them will simply be the print supplement of a pure player. Some will disappear or merge. TV and Women magazines which are far too many are specially threatened. The strategy of Springer, one of the best managed media groups, selling most of its print publications is a telling example.

And yet, people want to be informed and entertained. It means that the media industry will keep thriving but in  different ways, boosted by the initiatives of young pioneers who are still unknown.

Monday, December 23, 2013

medias: The collapsing print industry

The year 2013 is closing but no independent observer is optimistic about 2014 as far as the print media are concerned.

Lets look at France. Print advertising keeps going down by 6% a year while press delivery is literally falling apart. The press delivery organization, Presstalis is very sick and the kiosks and newsstands are vanishing from the big cities. For too long, the French press has counted on state subsidies to break even but the state is broke and there is no hope of a recovery of public finance in the near future.

The outcome is fairly clear. All press families will suffer this coming year. Two regional press groups, Sud Ouest and the newspapers of the South are close to bankruptcy and will survive through drastic reorganizations. The same with some national dailies. Groupe Amaury and le Monde will have to cut massively their expanses as circulation and advertising are going down too quickly for their safety.

The newsmagazines are looking for a future. Claude Perdriel has announced, without warning his staff in advance, his intention to sell Nouvel Observateur. Will he find a buyer? Most people doubt it. The same with Le Point and Express which are more or less on sale with no volunteer to take in charge.

Many other magazines are also on sale or could close down. In fact, most of the French press could change hands in 2014 if ever anybody was interested.

If we look at the US, we see a more promising landscape. True, the newspapers are still downsizing and many magazines have vanished or should vanish these coming months. However, a new organization of the news production is taking shape and could last for the next years. Unfortunately, it is based on a split of the population. Those who are avid news consumers and have the means to pay  a subscription to the New York Times or to the newsletters of Politico or to the afford the service of the Wall Street Journal. This population is fairly important and growing.

The rest, i.e. the majority, doesn't want to pay and goes more and more to popular websites such as Buzzfeed or Huffington Post that mix up news and entertainment. They also rely on social networks which are free but carry  a strange mix up of news and gossips.

It is very likely that Europe is facing the same kind of evolution. High quality news for those who can afford it and low quality information for free. A new challenge for our democracies.

Thursday, December 12, 2013

Native advertising and digital news financing

Native advertising is a nice name for a system that mixes up news and advertising. It is a big success on American websites including serious ones like the New York Times and the Washington Post. The internaut thinks he reads a proper piece of reporting but he hardly notices a discreet mention that the article is in fact an advertising handsomely paid by some big corporation.

Everybody knows what matters. The digital news services are at pains to break even. Proper advertising is not coming in; the paying wall works only for very powerful brands like the N Y Times and the internet audience is split between thousands of sites, most of them don't care about news and investigative reporting.
So, why not to try a bit of N A which carries much more credibility for the announcements than proper advertising? In a recent article Les Echos mentioned that the income of native advertising could be well over 2 billions dollars in 2014 in the US. A welcome windfall for the ailing news services.

Still it is not a miracle solution. The credibility of the news offers is at stake. The public will not be fooled for very long. I believe that good well checked information is a sound long term investment. The efficient and economically viable digital news service is yet to come.

Friday, December 6, 2013

the challenges of le Monde

For the prestigious French daily le Monde, 2013 is not a good year. Its circulation is down by 5% at 275000 copies. Its advertising income is just even thanks to the success of its Friday magazine. It is likely that the profits of the Website will just compensate the losses of the print version.

Still, there are some reasons to hope for the best. The Website attracts a powerful audience with nearly 9 millions unique visitors and 32000 digital copies are sold everyday, much much more than other national dailies such as le Figaro or les Echos. In fact, le Monde is probably the only French newspaper which is known worldwide and can attract French speaking internauts in Africa and America.

What le Monde needs is a global strategy to stop the fall of the print circulation which still contributes to 90% of its income and improve its paying services on Internet which should make for a lagging advertising revenue.

It means that the daily should move from an afternoon to a morning newspaper. It would allow it to be better delivered out of Paris and use the printing facilities of the regional press. No doubt such a move would turn an important profit that could be used to find new subscribers. Up to now, the subscription service has been fairly inefficient and needs to be boosted.

Moreover, the merger in process of the digital and the print newsrooms will definitely improve the offer of the Web service.

So the future doesn't look too bad but time is running short. 2014 will be a decisive year.

Friday, November 22, 2013

the fatal decline of the newsmagazines

The loyal readers of my blog know it. I have warned a long time ago about the decline of the newsmagazines. When you consider that in the US, only one, the Time, managed to survive while this kind of publication doesn't exist in the UK and the German Der Spiegel is suffering badly, you realize that France cannot feed with advertising and sales four news. Things are going to change and very soon.

Yves de Chaisemartin, the courageous owner of Marianne agrees that it will be a uphill battle to save Marianne, the weakest of the gang of four. And a merger of le Point and l'Express is bound to happen sooner rather than later.

One can accuse the shrinking advertising market and the fact that there are less and less newspapers stands in the French big cities which means that the average customer is less tempted to buy press products whose offer is rarefied.

Still the main factor is very simple: newsmagazines are desperately old fashioned. They thrived in the 20th century, thanks to a massive urbanization  in Europe and the USA when print paper was the easiest access to in depth news. They collapse now in the new digital age when the public can get every kind of information through his computer or mobile devices. A week is too long a delay when important affairs pop up every day on the many screens that surround us. Websites, whether they are pure players or connected to a daily, are more efficient, more user friendly.

Moreover, daily newspapers are transforming themselves to keep their readership. They deliver hot news, daily news and more in depth reporting, using both the print and the Web. Their large newsrooms are more reactive and efficient than the smaller teams of the weeklies that are used to a more relaxed way of life.

Information is a lively process. New breeds replace existing products that have outlived their usefulness.

Tuesday, November 19, 2013

New journalism attracts old journalists

The New York Times and the Guardian are prestigious titles whose websites are at the top of the list of world news services. And yet, they keep losing some of their best journalists who are attracted by new adventures on Internet that can also prove one day to be profitable.

Five years ago, Politico started with some of the best Washington correspondents from the Times and the Post. To day, Pierre Omidyar a very wealthy businessman is launching a new site devoted to in depth inquiries and he picked up Glenn Greenwald, the Guardian NSA scoop getter. Other sites like Buzzfeed and Yahoo keep hiring and often look for the best. In France, Mediapart could play the same role thanks to its growing audience.

In the November 18 issue of the Guardian Emily Bell observes that it could mean a sharp division between ailing popular and regional newspapers and a prosperous high level brand of journalism providing news to a world elite, ready to pay. Such is an unforeseen result of the Internet revolution.

Friday, November 15, 2013

The future of regional newspapers

The French regional newspapers have lost 1000 jobs in one year. Their circulation keeps going down by an average of 2% a Year and advertising keeps sliding down at about 7 or 8% these last two years.

The shrinking of the French press is not unique in the world. In the US, American regional dailies suffer badly and there is no end to it.

What are the reasons? Are there any remedies?
The main cause for this downfall is the fact that people under 40 don't buy papers anymore. Their parents made a great use of the local press because of all kinds of information they provided on their day to day life. Now, you can get these tips on many free websites that inform you on movies schedules, restaurants, sporting events, public transports and just everything.

30 years ago, the strike of the local daily could paralyze the life of a big city. To day, it is hardly noticed.

What are the solutions? There are two ways to make for this crisis that seems to last for ever.

First, the regional press must increase and improve its digital offer. They must set up a paying wall with very low rates as a start and a generous offer of news and videos. Never forget that the competition is tough and you have to outsmart the people that crowd the Internet field.

Then, newspapers have to think hard about their periodicity. Is it really necessary to publish every day? The print industry can survive for a long time but 7 newspapers a week is no more an obligation.

It means that the staff will have to be drastically reduced and reorganized. Less printers, more technicians experts in the mechanism of Internet and still many journalists with a different working schedule.

A hard challenge for the press establishment.

Thursday, October 31, 2013

More subscribers to the digital N Y Times

The 3rd quarter results of the New York Times Company show how a good strategy pays in this troubled period and teaches a lesson to some other actors of the media world.

The operating profit is up by 44% at 12.8 millions dollars, not because of advertising which keeps sliding down, minus 1.6% for print advertising and minus 3% for digital advertising.

However, the number of subscribers to the digital only service has grown by 28% in one year, reaching the stunning figure of 727000.

What does it mean? First, advertising has a very limited future in the digital economy. It is co-opted by a small number of very big operators such as Google, Facebook or Twitter who invest now in the mobile services and leave a very small space to the news providers. This situation is not about to change in spite of the relative success of video. Millions of news users don't compare to hundred of millions of Facebook clients.

Then, the only hope for news services is paid subscription but to succeed, you have to offer a real service at a correct price. If I may use my own experience, I can state that I consider my subscription to the digital NYT ,which I can use on my computer and my smartphone, is rather cheap, 12 euros per month. For that price, I have access to the gigantic data bank of a world newspaper and the 1000 journalists of its newsroom.

What about France? The subscription to dailies is rather expensive, 14 euros per month with a very limited offer of national and world news. The only newspaper which can develop a notable audience in the francophone world is le Monde but its rates are probably too high and its access to free news is too generous. Why would you spend 170 euros a year if you get for free the main pieces of information?

Wednesday, October 30, 2013

What media groups face the digital challenge?

Some news give a lot of food for thought.

Take for instance, the nomination of a Richard Berke, a top editor of the New York Times at a commanding position at Politico, the influential news website which keeps growing and is getting profitable.

Take also the policy of the two most dynamic European media groups, Springer and Schibsted. At the INMA News Media Conference that took place in Berlin last week, the matter was discussed as there are not so many successful medias these days. What did the German and the Norwegian groups do to survive and grow? They followed a long term involvement in digital activities, most of them not connected to news collection.
Last July, Springer sold many newspapers and magazines to finance its new ventures in digital activities. The owner of Seloger and Aufeminin makes 40% of its revenues with its digital branch and intends to go on.

Schibsted started 15 years ago to invest in digital classified and is now an European leader with and It is still the owner of major newspapers in Sweden and Norway which are politically useful but sooner or later, it will have to drop out of the print industry. By now digital ads make 25% of its revenues.

It is not a coincidence if these two groups are very profitable and hence, able to invest even more.

Tuesday, October 15, 2013

The New York Times keeps moving

If one compares the Washington Post and the New York Times, one can see the staggering difference between a daily which is successfully moving from print to web, the Times and another one which has let Politico pick up its best journalists and its top customers, the Post. It is hard to figure what Jeff Bezos is going to do to repair a fairly hopeless situation.

In the Guardian of Monday 14, Jill Abramson, the executive editor of the Times, explains what her vibrant newsroom is doing. It is playing the best card to boost the digital audience and attract advertising: the development of video, motion graphics and animation. Still the 1000 journalists newsroom keeps investigating on China, Apple or Bengladesh.

With 700000 thousands paying subscribers (one third out of the US) and 59 millions unique visitors, the Times is becoming a world global news provider. Competition will be tough for the other English speaking websites.

However, the interview hinted at a management problem which most newspapers will have to face: with the increasing importance of marketing and ambitious market research, the part played by the CEO is getting more important and perhaps, more intrusive. It is a touchy topic for Jill Abramson who has to live and work with Mark Thomson, the ex director general of the BBC.

Thursday, September 26, 2013

Digital and print. The breakthrough

One media- Audipresse has just published its audience results for 2012-13. The figures are impressive. More and more people read on both print and web.  33% of the readers use smartphones and tablets against 24% one year ago but 52% of the audience uses both print and web. It is common knowledge in most developed countries that the more people use digital supports, the more they use print too. Look at

The two strongest media are a free sheet 20 Minutes and a national daily, le Monde. 20 Minutes has a national monthly audience of 13 millions, le Monde, of 12 millions. They both register a digital audince close to 5 millions.

All the other figures show that the audience of both dailies and magazines keeps even as compared to previous years, thanks mainly to the growth of the use of smartphones and tablets. However, the economy  of this new situation is not fixed yet. Advertising is moving at a great speed from print to Web and to mobile. Paywalls work fairly well for national dailies with a rich content but are much less succesful for regional newspapers and magazines. The big question is : who is going to pay for what?

Thursday, September 19, 2013

newspapers on sale

The buying of the Washington Post by Jeff Bezos is just one stage of the lenghty process of property transfers of newspapers and magazines in most Western countries.

In the US, the Tribune company is trying to get rid at a bargain price of its former flagship newspapers such as the Los Angeles Times and the Chicago Tribune and the New York Times has just sold the Boston Globe with a heavy loss. The Gray Lady itself could one day be on the market in spite of the denials of the Schultzberger family. Remember what the Graham said two years ago?

In the UK there is no guarantee that the Murdoch family will keep for ever the Times and the Sun. Their ambitions are obviously turned towards movies and television, so much more profitable.

In France it is the same pattern. Neither Hersant, nor Tapie are to keep for ever their ailing dialies, Nice Matin and la Provence. Sud Ouest will sooner or later be transfered to some regional investor willing to trade losse for image. It seems obvious too that the Flemish group Roularta is losing patience with its French investments, Express, Etudiant, Point de Vue. After tough social plans, they could be put on the market. Same story with Amaury familyIt is of two minds about a partial or a total sale of a fairly prosperous group that suffers from its press branch, Equipe and Parisien.

What seems to happen is that a great part of the press goes to businessmen, tycoons looking for a good image but not relly interested by the job. The tragedy of the press is that it does not produce adventurers any more. They are all trying their luck in the digital world.

Tuesday, September 3, 2013

Bezos speaks on the Washington Post

In the september 3 issue of the Washington Post, Jeff Bezos speaks for the first time about his vision of the Washington Post he is going to visit to morrow. Needless to say, the man is cautious. He admits he is not an expert of the press and has no magic bullet to cure instantly the ailing newspaper.

Still, some of his comments exhibit a lot of common sense. He stresses that the Post cannot go down the drain indefinitely. A business must, at some point thrive and grow unless it becomes irrelevant. However the digital competition for print newspapers is punishing and the paywall is fragile. As he says, when the Post publishes in print version the result of a lengthy and costly investigation, it is immediately summed up and dispatched on many free websites. For the internaut, there is no reason to buy the daily if he gets for free the main elements of the topic. And yet, one has to find funds to finance the work of the journalists. In other words, digital subscription is not the global remedy, it is part of an elusive solution.

Bezos does not explain how this dilemma can be solved and I am not sure there is an obvious solution. It is likely he is going to try and the man is patient but what will happen in five years?

Thursday, August 29, 2013

Is Newsweek the model of the French newsmagazines?

The sad story of Newsweek which sold two millions copies ten years ago and is now slowly dying as an electronic publication with very few readers gives a lot of food for thought.

It is a tough lesson for the French newsmagazines which are too many and now fighting to survive. L'Express has tried a new formula which is a failure and is losing circulation and advertising. Its owner, Belgian group Roularta considers it more and more as a black sheep it could do without.
Things don't look better for its main competitor, le Point. Its management prepares the buying off of a part of the staff. Nobody knows if Pinault its owner and an half retired aging businessman will keep it. However, candidates for an acquisition are scarce.

The two other leftleaning newsmagazines don't fare any better. Marianne is in a desperate situation. Few people would bet on its survival. Nouvel Observateur is in better shape. Still, it is losing money and its powerful chairman and owner, Claude Perdriel is 86.

For many years the newsmagazines prospered in France thanks to the lack of dynamism of the dailies which were both too expensive and too cut off from their readership. Now a lot of things have changed. Le Figaro and le Monde have developped attractive new sections and dynamic websites. They certainly are also in trouble but they begin to cash on a growing population of web subscribers.

For the News, the competition with Internet is not so easy. If they enlarge their websites with daily news, they compete with the many information sites while their teams are used to a weekly production. They canibalize their paper delivery with a very limited economic downfall. It was the end of Newsweek, it is a big challenge for der Spiegel, the biggest German Newsmagazine which was so powerful, not so long ago.

One can be sure that in five years, France will have, like Germany to day, only two newsmagazines and their life won't be easy.

Wednesday, August 7, 2013

Amazon and the Post. Lobbying and philanthropy

Is jeff Bezos a very wealthy philanthropist like Bill Gates or Warren Buffett or a cunning calculating mogul? In John Cassidy wonders with some good reasons.

It is difficult to believe that the owner of Amazon  expects a good profit from the ailing Washington Post. Its former shareholders, the Graham family were facing a quandary: reduce drastically the staff of the newsroom to stop a bleeding deficit at the cost of the newspaper quality or keep losing money indefinitely. They sold because they could not cope anymore. Certainly Jeff Bezos can afford some losses but he does not hold a magic formula to make the Post profitable, even he develops a more comprehensive digital strategy and he is fully aware of that. For him, the Post is certainly not the best investment.

However, there is probably another motive for this stunning acquisition. In spite of its falling circulation and the competition of Politico, the Post is still a powerful instrument of influence inside the Beltway. Its editorials and reportings are read carefully by the government and the Congress. It is a well known fact that the Graham family was one of the most powerful actors on the Washington scene.

And Jeff Bezos, head of one of the largest world corporations with a revenue of 60 billions dollars, needs to influence the US administration. Amazon is involved in very tricky fiscal conflicts, concerning the payment of the sales tax. Moreover, a group that size is very vulnerable to any kind of anticoncentration policy. To own the only daily in the Capital is a guarantee to be listened to carefully by the powers that be.

Still the new boss will have to manage an efficient newsroom of 600 journalists. To be credible and influential, the newspaper will have to show some independance. Another quandary for Jeff Bezos?

Tuesday, August 6, 2013

The sale of the Washington Post

The sale of the Washington Post, the flagship daily of the American capital is a stunning event but gives a lot of food for thought.

What was the train of thought of Donald Graham, the head of the family that owned the newspaper for 80 years? It seems one can give some answers right now.
Don Graham realized that there were no short term solutions for the continuous decline of the famous daily. Its circulation has gone down from 830000 copies in 1993 to 430000 copies in 2013. its advertising revenue has not stopped falling since 2006 and if the group is profitable thanks to local TV stations, the newspaper keeps losing money and will stay in the red for the next few years. Its digital policy is far less successful than the New York Times's.

Also, the chairman knew that its family was at wit's end and had no solution to offer to stop the decline. So, last december, he started to look for an investor who had deep pockets and a genuine interest in newspaper business. Jeff Bezos seems to fit. He is worth 25 billions dollars so the price of the Post for 250 millions amounts to just 1% of his fortune. Moreover, he is deeply involved in digital economy and he has shown he is willing to invest long term. His firm, Amazon has lost a lot of money for many years before breaking even.

So the decision of Don Graham is courageous and  thoughtful. He wants to save the Post, he is fair enough to understand that his family cannot do the job anymore and he picks up a man who has energy, ideas and money.

It is a big lesson for the European press. What is Murdoch, who is 80, going to do with his troubled British newspapers, the Times and the Sun? What are going to do the Amaury family with le Parisien and l'Equipe and the Lemoine family with Sud Ouest?
It is the end of a certain model of the print industry.


Sunday, August 4, 2013

new york times and washington post a slight improvement

The two main newspapers of the East coast published this week their results for the second quarter. They were not very good but could have been worse.

The NYT announced a net income of 20 millions dollars against a loss of 87 millions last year. Advertising keeps going down like in Europe but the circulation revenue is up by 5%. Now the newspaper has 700000 digital subscribers, plus 35% from 2012. A confirmation that  the digital policy of the Times is a success. The sale of the Boston Globe for 70 millions dollars is another sign of the strategy of the group to focus on the flagship newspaper and its international publication the Herald Tribune renamed this fall International New York Times.

The Post group has a revenue of 1billion for the second quarter with an income of 44 millions thanks mainly to local television stations. The circulation of the daily keeps going down by 7% but the online revenue keeps growing by 15% to 30 millions. The newspaper is finally starting a paywall which should be less successful than the NYT.

So, the lengthy and painful process of reorganization of the press, moving slowly from print to digital is going on. Still, one must not forget thet in the US as in Europe, digital publications cannot afford the huge newsroom necessary to cover comprehensively the current affairs of the world.

It gives also food for thought that the biggest success of digital publications in Washington, which is Politico, doesn't belong to the Post.

Friday, August 2, 2013

Omnicom and Publicis. A risky merger

The merger of Omnicom and Publicis, announced on Sunday July 28 is a risky adventure. The executives of the two companies show a lot of chutzpah but can we take for granted their rosy statements?

Of course the figures are fantastic: 14 billions dollars of income for Omnicom, 8 billions for Publicis. The result should be the world's largest advertising agency if...

If the anticoncentration authorities of Washington and Brussels agree to the megamerger which is already criticized by their competitors like Havas and WPP but also by the big clients of the two firms. Coca Cola and Pepsi Cola are not too keen to share the same agency and many giant groups share the same worry of a permanent conflicts of interest.

If the French shareholders realize that the French Publicis will be more and more transferred to Amsterdam and New York and risks to vanish completely from the local scene.

If the Internet giants, Google and Facebook which are collecting the big data all over the Planet let this ambitious new agency stamp on their field and try to explore the promising digital market.

The stunning news of the Publicis-Omnicom mariage is not the end of the story, by far. It is just the first battle of a long war to control and exploit the data of billions of consumers. Nobody, right now can give the name of the victors but the winners will need to have very deep pockets indeed.

Wednesday, July 31, 2013

Politico against local TV

Is Politico more valuable than Local télévision? It's what seems to think Robert Allbritton, owner of the group that bears his name and is based in Washington. He has just announced the sale of 8 television properties to Sinclair group, for 985 millions dollars. He intends to invest this huge amount of money in new services on the Web, including a development of his flagship news service, Politico which started from zero five years ago and is breaking even with a staff of 230 people.

Local TV is still a profitable business in the US but its audience is suffering from the competition with Internet and various news services on cable and satellite. For the moment, it is very much looked after by media groups.They try to increase their portfolio of this local media which still turns out big profits.

However, the future is hard to predict. The gamble of Allbritton group will be interesting to watch. A lot could be done with Politico: to set up an international service, to be present in other cities such as Naw York, Los Angeles or Chicago. It will cost a lot of money but the funds are available now.

Sunday, July 28, 2013

The end of TV Mags

The publishers don't believe any more in TV magazines. Last week, Springer announced it was selling its flagship weekly Horzu, which dominated the world of TV programs  in Germany, for half a century. A few years ago Murdoch sold the famous American TV Guide. In France, the circulation of Tele 7 jours, once the best selling weekly of Lagardère with close to 4 millions copies has gone down to less than 2 millions.

It seems that this family of magazines is in sharp decline for obvious reasons. There are too many channels which cannot fit properly in a paper magazine. Moreover, people use more and more catch up TV and video on demand and watch an infinity of programs on various supports .Internet provides all useful informations and usually for free. Even value added publications like Telerama are facing decreasing sales and un uncertain future.

The same thing happens with movies. Why should people consult the programs of their local movie theaters in their newspaper  when Allo Cine provides them with a very accurate information on what's happening all over France. Considering that, it's hard to understand why no French media group bought Allo Cine when it was on sale last June. Fimalac, a prosperous investment trust that belongs to Marc de Lacharrière was smart enough to acquire this very successful date base of movies.

Friday, July 26, 2013

The triumph of Netflix

Is Netflix about to kill the ordinary broadcasters? A recent article in the New York Times answers: yes, maybe. This highly successful distribution system which has more than 20 millions subscribers in the US is beginning to be a successful producer. Its first serie "House of Cards" is considered one of the best in recent years. It seems that after this successful attempt, Nestflix intends to work more and more with Hollywood and spread its programs all over the world.

And why not? The subscription to Netflix is rather cheap, around 10 dollars a month as compared to the high cost of cable subscriptions that can go up to 100 dollars.  The offer is attractive and varied. For the moment, Netflix is far ahead of Google, apple and Amazon who try to launch universal TV programs delivered through the Web but lag far behind.

What about France? For the moment Canal Plus has a kind of monopoly on pay TV and Netflix is still absent, a bit scared by French regulations. However, this is not going to last. The future of television relies upon video on information websites and fiction on low cost channels that can be watched on every support, computers, tablets or smartphones. A lot of food for thought for the big three: TF1, M6 and Canal Plus.

Wednesday, July 24, 2013

The regional newspapers crisis

French regional newspapers face their worst crisis in 50 years. Nobody knows in what shape they will finish a long year 2013.

It is a matter of both money and ownership. As far as money is concerned, the advertsing income is down by 10% from a 2012 year which was rather bad. Classified ads are vanishing, moving to Le Bon Coin or other dynamic pure players. The circulation is down by 2 or 3% but 2012 was not so bad thanks to the presidential and parliament elections.

The ownership problem is even more serious. Most of the owners are broke or not willing to invest. In the South, the divorce between Tapie and Hersant won't carry any proper solution. Tapie will not be able to invest in la Provence which badly needs a fresh amount of cash. He will probably be forced to sell. Same thing with Nice Matin and Hersant. The sale of the Riviera newspaper is bound to happen very soon. Some Monaco investors are interested.

Group Sud Ouest is also in trouble. The family owners cannot afford to pay back 70 millions of loans and finance a 150 employees buying out. They are starved of cash and looking for a benevolent investor. This fall, tough decisions will be taken.

Even Michel Lucas, the banker and owner of the eastern newspapers seems reluctant to invest more. His huge press group hardly breaks even.

Most dailies keep investing in a digital offer but the profits are scarce and don't make for, by far, the loss in advertising and circulation.

Friday, July 5, 2013

A paywall for the Guardian

Is the Guardian a success or a failure?  In the Washington Post of July 2, the question is asked. This independant British newspaper has managed to collect recently the most spectacular scoops. The lates is the publication of first hand informations on Prism, the secret system engineered by the Americans to collect e-mails and telephone calls from all over the world.

If the circulation of the paper version of the Guardian is lagging at 150000 copies, the website is a tremendous success. It raises to 41 millions unique visitors per month, the largest information site in English.

And yet, the finance of the newspaper goes deep in the red. In fact it loses about 1 million pounds a week. The future of the Guardian which belongs to a private foundation is threatened by what is turning into a permanent deficit.

The solution seems obvious to many observers: Why is the group so reluctant to accept a paywall and follow the exemple of its main competitor, the New York Times? Of course, its audience would go down but if you consider the scope and the quality of the information it provides, many people, all over the world, would be willing to pay. With 1 million subscribers paying 150 euros a year, the Guardian would be eminently profitable and could finance an enlarged staff.

As we look at the evolution of the media on the web, it appears that gratuity is a thing of the past.Lets hope that the Guardian will follow the major newspapers of the world.

Tuesday, June 25, 2013

Bernard Tapie and the future of newspapers

When Bernard Tapie bought into La Provence and Nice Matin he delivered ambitious statements about his media policy. According to him the newspapers of the South could recover from their past losses and diminishing sales. He asked Patrick Lelay, ex chairman of TF1 and an old mate to audit the fledging dailies and  suggest a full reorganization of their staffs.

It was a long time ago, six months. Since then, the famous businessman has been silent as well as his unhappy partner, Philippe Hersant. However, Tapie has not left the world of newspapers, not as a press mogul but as an object of investigations by judges and reporters. Now that the judicial process is aiming at the past deeds of Tapie with the possible cancellation of his 400 millions deal with the government, the press business seems very remote indeed;

The big question, now is what is going to happen with the Southern dailies. Will Tapie be obliged to sell his 50% share? Who would be ready to buy? Is it possible to find in 2013, new investors for both Sud Ouest and the Southern dailies, the sick members of the regional newspapers community. We wait for the answers.

Friday, May 31, 2013

TV Are the networks breaking down?

Internet and the digital technologies have already deeply disrupted the musical world, the press and the publishing industry. The next step, in the US and very soon in Europe is the breaking down of broadcast television. Until recently the networks had to face the challenge of theVOD and the fact that tens of millions of viewers want to watch their favorite programs any time, when they like. The boradcasters have complied and provide services free for a short time and then paying where you can get all the programs already shown in the air.

Now things look a bit different. The digital geants such as Google, Apple, Amazon or Netflix want to be producers and programmers. They are starting to invest in programs of entertainment or fiction, like "The house of cards" from Netflix. They also buy the rights of series and films to the Hoollywood giants, only too willing to get more cash. Youtube, the video branch of Google is building up full channels which you can get on the Web at a bargain price.

The competition can be deadly for the networks in the States or in Europe, now that a majority of the population is starting to use tablets which are cheaper and more user friendly. France which owns the most successful European support of video, Dailymotion should have a second thought before selling it to just anybody. What if Dailymotion is the successor of TF1?

Tuesday, May 7, 2013

Politico drops local television

 Politico, drops local television. In a nutshell, it is the message sent last week by Mr Allbritton the 44 years old head of the Allbritton group. This powerfull media enterprise based in Washington DC has made a significant move towards the digital age. It is about to sell its 7 local TV's including a very prosperous station in DC for about 300 millions dollars to invest in digital news. And it keeps and intends to develop its flagship activity in Internet, Politico, the very successful web and print publication on the US political life.

Allbriton stated that Politico that started 4 years ago with 2 top journalists from the Washington Post employs now 200 people and is profitable. It is fairly obvious that new websites will be lauched thanks to the big money collected through the sale of the local TV's. Two years ago, at a conference in Paris a Politico executive hinted that a public could be interested by an international affairs site. It would be a costly investment but the financing is there.

At the same time, the Washingon Post is steadily declining. for the first term of 2013, its sales and its advertising income are down and the future looks very dark indeed. In DC it is a tale of two medias.

Aids to the press

The report on the reform of aids to the press was published last week on the website of the ministry of Culture. Its content confirmed what I wrote in my blog of April 17. The government is willing to keep a low VAT on all kinds of publications including electronic news services. Moreover the looming crisis of Presstalis influences strongly the debate and the report. It is obvious that the generous subsidies to the postal service will be drastically reduced in order to finance the huge bill of a large buying out of Presstalis employees. A conservative evaluation puts it at 100 millions euros and nobody is willing to foot the expenses.

Still, there is no long term design for a new organization of the ailing French press.  

Wednesday, April 17, 2013

french press less subsidies

The ailing French press will get less and less public subsidies. Up to now, government aids amounted to 10% of the budget of newspapers and magazines. However, the French administration is broke and a major upheaval of the cosy system enjoyed by the press since 1945 is about to happen.

It is likely that newspapers and newsmagazines will keep a lower VAT and some help to home delivery but the other publications will have to face a sharp rise in postal rates due to the massive reduction of Post office subsidies. Groups like Mondadori, Prisma or Bayard will suffer more than le Monde or le Figaro.

Still, the government faces drastic choices for the future. The French delivery system is in shambles. According to some experts its reorganization could cost up to 250 millions euros while nobody, neither the publishers or the state is willing or able to pay. A massive transfer from postal service and Presstalis to home delivery managed by the regional newspapers networks implies a costly reorganization. And internet services are thriving on fixed and mobile supports.

A big question looms above everything else: is the media industry too complicated to be managed by the not very competent government?Most European countries say yes.

Wednesday, March 20, 2013

French regional newspapers. The vanishing ads

The last Pew report stresses the crisis of the American newspapers, devastated by the steady fall of advertising. It is the same story in France. In 2012, the regional press lost 60 millions euros from 2011, i.e. 6%. The global advertising market fared much better, thanks to TV and digital supports that kept growing.

Between 2007 and 2012, the downward trend of the press contrasted with the growth of the global market so that its share of the advertising market fell from 40 to 30% as the share of TV went up by 5 points. so the net loss of the press in 5 years is 1.6 billions euros. It explains why newspapers and magazines never stopped downsizing during that period;

As far as regional dailies are concerned, their main worry is the loss of classified ads moving massively to the web. Between 2007 and 2012, classified ads income went down by 31% as compared to local advertising -17% and national advertising -16%.

What hope is there with advertising on the local press websites? Things improve but very slowly. In 2012, local ads on the web made only, 55 millions euros and 7% of the regional newspapers  advertising income. It is 20% more than the year before but not enough to make for the global loss of revenue. National ads on the web are not so dynamic. Last year, they grew by1.6%.

The global growth of income was then 9 millions euros as compared to a loss of 69 millions in print ads.

In the long term, a balance between the print and the web will be found but it will take many years and don't forget that collecting news is a costly job.

Monday, March 18, 2013

Some news from the American media

The annual reports of the Pew research center on the media is a landmark for all media experts. It gives an exhaustive account of the health of the American media. It is also a useful reminder for the Europeans who are aware that what happens in the US will soon cross the Atlantic;

The Pew states that the American public is still very interested by the news. However, 50% of the population use digital media to get informed. This way, they have access to all media which are delivered in a way or another through the Web. But, and it is a big but, the offer is not so great. Due to economic problems the journalist population is schrincking. In 2013, the newspapers employ 40000 people which is the same level as 1978 and it keeprs going down.

 Local television, an important media in the US is following the same way. It devotes 40% of its space to traffic, weather and sports. Politics and government are limited to 3%. It is obvious that investigative journalism is stalled thanks to a lack of  money and human means. Local reporting suffers as much as national or foreign news.

To face a dramatic financial crisis due to the fall of advertising, the newspapers develop paying services. Out of 1380 American newspapers, 450 have adopted the paying wall and more will do the same this year.

Cable news channels are fairly successfull but they are more and more partisan to reach a public which wishes to be comforted in its opinions. There again, investigative journalism has not a great future.

What can be done to stop this process which is also apparent this side of the Atlantic? I'll go back to it in another blog.

Wednesday, March 6, 2013

The worth of newspapers

One of the major upheavals in the press industry has been the abysmal fall of the value of newspapers. In the US where the Boston Globe, the Los Angeles Times and the Chicago Tribune are on sale, their value has gone down by 90% in ten years. None of them is worth more than 100 millions dollars as compared to a billion in the late nineties.

It is of course the same in France. If the group Sud Ouest which is badly in need of cash sells the Midi Libre, it can hardly expect more than 30 millions. Not enough to satisfy the banks, CIC and BNP Paribas, who are the main creditors of the fledgling enterprise. And the Lemoine family and its 30 members would have a lot of trouble to sell the whole group Sud Ouest. Not only its value would be very low, probably inferior to 100 millions, but there is no obvious buyer. The French press groups are too much in trouble to move and no foreigner is much interested by the troubled French landscape.

Magazines and notably newsmagazines do not fare any better. If Rick de Nolf wants to sell l'Express or François Pinault tries to get rid of le Point, they cannot expect any bonus. Potential buyers are rare and tight on money. And yet, it is obvious that the newsmagazines are too many to survive the Internet revolution. Wait a bit. More change is coming.

Monday, February 18, 2013

The oversubsidized french press

Is the French press oversubsidized? No if you listen to the various press organizations who insist on the sorry state of most newspapers and magazines who suffer from both a loss of sales and of advertising and face a very difficult year 2013. Yes if you listen to the annual report of Cour des Comptes or if you read the parliamentary report of Mr Françaix, MP.

The real problem lies with the French budget which is harder than ever to balance. It seems obvious that the government cannot afford anymore to spend 1,2 billions euros for helping a fledging industry which is not so well treated in other European countries.

What Cour des Comptes and Françaix suggest is that it is not logical to subsidize at the same time the Post Office and the home delivery system. If newspapers and weeklies transfer the delivery from a costly and less efficient postal service to their own home services, there is no reason to keep a 300 million euros help to the Post.

Another matter is the fact that many magazines devoted to TV programs or people news profit from a benevolent and generous  French system. Françaix considers that only publications dealing with news i e dailies and newsmagazines contribute to a democratic debate and should deserve a public support.

The government has set up a commission to work on the reform of public aid. By the end of April, it will have to state a position on postal service and magazines, two very tricky topics. The various lobbies are very active and president Hollande will have to face very unpleasant choices.

Monday, February 4, 2013

The Google deal

So Google managed to extricate itself from an akward situation in France by signing a protocol with the French government and the newspaper industry. It will cost 60 millions euros to the giant of MountainVview plus an exchange of Internet technology with the print media.

Is it a good agreement? Probably yes. Will it solve the basic problems that the print industry faces as the digital news get more and more intrusive? Probably no;

The press managed for once to speak with one voice and benefited from the support of the Hollande administration. The fund will help to finance some improvements in the digital offer and the use of the Google platforms can be useful. However, Google partnership will not be enough to make for the lack of strategic vision of the dailies and weeklies which were involved in the deal.

The newspapers don't need the advice of Google to improve their offer on both the print and the Web. And yet, this improvement is the only way to keep the favour of a public which is slowly pulling out. Another big challenge is the growing use of mobile supports, smartphones and tablets. What kind of news, what ads can be provided through these very popular systems?  There again Google doesn't provide the answer.

And last but not least, the new protocol does not include the leisure and people magazines. In France they command a powerful lobby led by Lagardere. They will most likely push their case and embarass the government.

Lest wait for the next step.

Wednesday, January 30, 2013

The Washington Post quandary

In the last Sunday edition of the Washington Post ( January 27), the ombudsman stated the newspaper and newspapers quandary in just a few words. First, the cost of the daily. When I was staying in DC in the late 90's I marvelled at its low price, 25 cents for more than 100 pages of news and ads every day. Since 2001 the price of the Post has increased fivefold. Since last week it is 1.25 dollar. The reason is obvious. Advertising that contributed 80% of the revenue has gone down to 45%. Now the Post is not in any better position than the French newspapers which are so expensive and get hardly 40% of their income from the ads.

Internet is of course the main factor of this downward trend. Craigslist in the US or Leboncoin in France attract most of the ads that were the main source of profit of the dailies ten years ago. So it would be logical to ask Internet to help now the press to survive. However the ombudsman stresses that it is not very profitable due to intense competition between thousands of websites that each attract their piece of advertising.  The only way to move forward is to make people pay. The NY Times seems to be quite successful. Now, the Post must give up its free offer and start a paywall with no guarantee of success. No doubt it is a cultural revolution but is there another solution? The ombudsman doubts it.

Thursday, January 24, 2013

Is the New York Times a model?

Margaret Sullivan is public editor of the New York Times. In the January 19 issue of the famous newspaper she stresse the major problems  of a daily in 2013. "A milestone behind, a mountain ahead" as she says.

The milestone is the fact that in 2012, for the first time, the circulation revenue, including the digital edition, surpassed advertising revenue. Its a landmark if one considers that until very recently, advertising contributed to 80% of newspapers income.

And yet, the Times, like every other daily gets still most of its money from the print. As advertising in the print edition fell by 11% last year, it is obvious that the proud newspaper is far from reaching a safe balance able to finance its newsroom with its 1100 journalists. That is the mountain ahead. One solution is to cut the staff and the executives of the Times are buying out some journalists but what of the investigative power that attract print and digital subscribers? it can only work with women and men both competent and highly motivated. For obvious reasons, Margaret Sullivan is worried.

The annual inquiry of la Croix on the opinion of the French on the media is not very comforting either. It is true that only 35% of the public trusts Internet against 54% for the radio and 49% for the press. However, 27% go to internet for getting the last news against 24% for the newspapers and 69% for television. The audiovisual media cope well; the print media suffer.

Thursday, January 10, 2013

News on Le MONDE

The famous newspaper is starting 2013 with many questions and few answers. It has to find a new editor in chief to replace Erik Izraelewicz whose sudden death was a big shock for the newsroom. It is likely that his successor will be an insider, coming from the staff of the daily. No name is emrging yet.

Louis Dreyfus, the talented CEO will also have to cope with a sharp increase of the price that went up on January 1st by 12%, from 1.60 to 1.80 euros. According to Dreyfus, some members of the board would have been willing to raise the price to 2 euros, following the exemple of the N Y Times which is selling now at 2.50 dollars. It is obvious that to stop the fall of the sales it will be necessary to boost the number of subscribers. It is a top challenge for the sales management of the daily. They will have to be more efficient and follow the model of their sister company Telerama.

The last challenge is the digital policy. To make for the loss of circulation and the dark outcome in advertising; the digital branch must be more and more profitable. It is not so easy. Le Monde must cut drastically the free offer of its website to  attract a new population of subscribers. It aims to move from 45000 presently to 100 000 which would bring a welcome bonanza to the income of the daily. However, it will take a long time, maybe 10 years before le Monde digital can finance a 300 editing staff.

It is also obvious that the fate of Presstalis, which is slowly collapsing, will be of the utmost importance. Le Monde could easily be delivered by the powerful network of regional newspapers. It would be cheaper and more efficient, expecially if the daily becomes a morning newspaper. There again, one will have to wait for the death of the ailing system and a workable solution for its 2000 employees.

Wednesday, January 2, 2013

2013 The ultimate challenge

Happy new year for all my friends from the print news. 2013 will be a most perilous year but the challenge will be exciting. At the start of the year the big question looms over everything else: what can do the press industry to survive and fulfill the growing appetite for news the world over.

Lets have a look at France first. The outlook is very bad indeed. Advertising will reflect the poor shape of the economy. At best,advertising income will stay at the same level as 2012 which was not a good year. At worst, it could go down by 5 or 10%. It means that many dailies and magazines won't be able to survive. Libération and Marianne are the first to be mentionned by the doomsayers but the future is not rosy for le Monde whose budget is a bit optimistic. What is at stake is the good health of their websites that contributed albeit modestly to the profit of many dailies last year. However, the outcome this year is not so good. What will happen if the Web is also losing money due to a thankless competition from Google and social networks? It will be a very worrying for le Monde, le Figaro and several regional dailies.

Add to this dismal situation the crisis of the delivery system, ie Presstalis. The government missed the opportunity to settle the matter last summer. Now, it is too late to stop the suicidal strikes of the unions that sink the sales of national dailies and weeklies.

In the US, things don't look much better. The Washington Post, one of the best, is losing income and sales and has yet to deliver a proper strategy for its website.The fall of Newsweek shows that a certain way of delivering the news, on a weekly basis, to people who are already fully informed every day, is definitely gone. It is also obvious that intensive use of applications on mobiles plus Facebook and Twitter promotes the images of the press but brings no income. The American media have not found yet the solution.

And yet, top quality publications such as The Economist or the New Yorker, both weeklies, manage to work well. It should be the same with the French edition of Vanity Fair due for june 2013.  Our world is very complicated and people want to understand. A nice job for good journalists.