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.