Monday, December 21, 2015

New journalism, new practice

A recent seminar organized by the Sciences Po school of journalism with contributions from top Anglo-saxon actors showed how quickly the news scene is changing.

A master word is engagement. What worries major operators like the FT or the NY Times is the time spent reading the messages or watching a website. If a user retweets a piece of news without reading it, it is a total waste for the news provider. With the growth of mobiles that make now 50% of the audience, the risk is even greater. It is why the Instant Articles proposal from Facebook can be attractive. Facebook customers get the best articles from their favorite newspaper in a few seconds. If you don't wait for the loading, you have a better chance to read the text. However, some French operators like Le Parisien are reluctant. They criticize Facebook for providing very few data on the readership and data are more and more the future of digital media.

Google, Facebook main competitor has fully grasped the challenge. According to the head of their German research center, they start delivering for free very interesting data on most consulted keywords. British newssites received such a collection of data during the last British elections, a good way to assess the topics that interest the voters. Everybody knows that the social networks are fully informed about the behaviour of their hundreds of millions of customers, a precious  piece of information for news operators who lack the means to collect these data. It is getting more and more obvious that the delivery and the engagement for the news will have to rely on the all powerful social networks but as we know too, there are no free lunches. A big question: how the media will keep their freedom if they depend more and more on world giants.

Robot journalism is also on the list of priorities. In France, le Monde and le Parisien relied on the algorithms provided by the start up Syllabs to cover the last regional elections. Some editore are thinking of using them also for sports coverage. It will be another revolution in the newsroom even if it should allow more time for journalists to do indepth reasearch.

Friday, December 4, 2015

Canal Plus What can be done?

In my previous blog, I showed how precarious was the situation of the pay channel Canal Plus, facing a tough competition on its main programs, sports and fiction.

In this post, I shall attempt to provide an unsollicited advice to Vincent Bolloré, the powerful chairman of Vivendi and its subsidiary, Canal Plus.

It appears that Canal has already lost the battle in the field of sports rights. Bein TV, the sports broadcaster financed by Qatar with its illimited funds, is buying the main competitions in soccer, basket and others and Altice and Next TV have just bought into the British first league. Apart from buying Bein TV, an idea suggested by the daily Figaro that doesn't seem very likely, Canal risks to be marginalized.

However, there is still hope in the field of fiction. Contrary to  sports, Canal has more leeway to produce the best series and invest in top movies. Its teams have a lot of experience and have been very successful in the past. Of course, picking up the best directors and screen play authors is expensive but there Canal is in full command which is not the case with sports rights.

So, I think that Canal should change drastically a model which has been very profitable for 30 years but is not working anymore. The broadcaster should drop sports altogether and offer a full program of high quality fiction series, movies and documentaries. It would also sharply reduce its subscription rates from 40 to 20€ per month.

To put it in a nutshell, Canal Plus should follow the pattern of HBO in the US and, hopefully, win the competition with Netflix which is cheaper but has not an outstanding program.

Such a revolution would mean that Canal would lose millions of subscribers looking for sports only but it could reach a new public with a cheaper and more entertaining offer of fiction.

What is sure is that Canal cannot stay the way it is.

Monday, November 30, 2015

Has Vivendi a strategy?

Vincent Bollore, the powerful chairman of the Vivendi media group is facing a strategic quandary. He must answer rapidly to the challenge of Vivendi's subsidiary Canal Plus, the prestigious pay TV channel that enjoys 7 million subscribers spread in France but also in Poland and in Africa.

Since its creation in 1984, Canal as users call it has been a very successful French HBO, building its offer on highly rated movies and series and first league soccer matches. To have access to its premium menu, customers were willing to pay 40€ a month. Until recently the company was very profitable and brought a lot of prestige to Vivendi whose other branches are working in less glamorous fields such as music and telecom.

However its managers did not grasp in time major upheavals in the media field. These last 5 years, incentives to subscribe have greatly diminished. The offer of free channels has gone up to 23. Moreover, two new competitors have attacked the French market, investing in what used to be Canal's main assets. Bein TV financed by illimited Quatar funds offers for 11 € a month a large choice of sports competitions. Netflix started last year with American and French series for 10€ monthly. Its not a big surprise if the number of subscribers is going down at a fairly fast pace.

A few weeks ago, Vincent Bollore who took over Vivendi last year stated that he was willing to invest as much as 2 billion € to develop and improve Canal's offer. Yet, to everybody's surprise he let Canal lose the British soccer first league bought for 300 millions by Altice, the ambitious media group owned by Patrick Drahi.

It appears that by now Canal subscription rate is much too expansive. Bollore finds himself in the uncomfortable position of Air France chairman facing the low cost companies such as Easyjet. In television, as in Air transport lowcost is now the rule.

What can be done to save  French television major player? We shall discuss solutions in this blog's second part.

Tuesday, November 17, 2015

The Washington Post A success story

On October and for the first time, the digital audience of the Washington Post was larger than the NY Times. It is an impressive success for the gray lady is a toughcompetitor and has been active and dynamic for many years in the digital field. However, its results are mixed. The third quarter figures for 2015 showed that the NYT could not stop the fall of ads in its print edition and in spite of an audience of 1 million subscribers, its digital site cannot make for the losses in print advertising. Also, the Facebook offer of advanced articles that was supposed to provide new ad incomes for the newspapers does not work as well as it was supposed to do. It seems to cannibalize the audience of the legacy media websites without carrying much new profit.

As far as the Washpost is concerned, it appears that the sale to Jeff Bezos was a smart move from the Graham family. Contrary to what many people, including myself feared, the Amazon owner has played his part very successfully. He has stopped the flow of departures from the newsroom and hired a huge team of technicians to improve the web operations. He has also approved a very aggressive marketing policy, offering very chap subscription rates to the digital users in order to attract a large new population.

Still, these two major newspapers face now another challenge which has been met already by several pure players like the Huffington Post, Politico or Buzzfeed: how to keep growing. The only way is to look to Europe and Asia wher there is a large English speaking population. One can bet that Bezos will work at it thanks to his world Amazon network.

A last question. What is doing France's Bezos, i.e. Niel coowner of le Monde? it's time he works on the newspaper's digital strategy.

Monday, October 5, 2015

Regional newspapers the fall season

Last week, minority shareholders of the  regional daily NRCO based in the center of France announced they were willing to sell 25% of the daily's capital. Press observers wondered aloud who would be foolish enough to buy.
Many newspapers are or could be on sale. It is the case of Sud Ouest, number 2 of the regional press whose owners are trying to find a way out without losing too much. Sud Ouest group was valued 300 millions euros, 10 years ago. Now it would be around 60 millions.

Nice Matin, the once prosperous Riviera daily is deep into financial trouble. It is owned presently by its employees but it is obvious they will have to rely very soon on a local investor.

On the eastern part of France the many dailies belong to a bank, Crédit Mutuel. Their circulation is droping fast and they move deep in the red. The aging chairman of the bank, Michel Lucas or his successor will have to sell soon but, once again, who could buy?

One group seems to be willing to reorganize this devastated field, it is the Belgian Rossel which owns already Voix du Nord and several publications in the East of France. It has however to find a proper financing not only to buy in but also to buy out the redundant employees, mostly printers who are less and less necessary in the digital age.

As I have explained many times in this blog, US local press does not offer a remedy to the decline of the regional dailies. On the other side of the Atlantic, things don't go well. One has to think very thoroughly about what users consider is valuable in local news.

Digital news service needs subscribers

A hard lesson learnt these last few years by the digital news operatives is that advertising is not the solution to finance an ambitious news service. This is why, Facebook offer of advanced articles from legacy media is well received by powerful newspapers such as the NYT or the Guardian who prefer to share advertising with the huge social network rather than trying a hopeless competition with it.

Still, there is nothing better than a loyal population of subscribers. To attract them, many media have tried a counter rule. Once you have read 10 articles during the month, you must subscribe if you want to read more. The NYT, the New Yorker or, in France, le Monde or le Figaro have used this system with some success.

However, the Finacial Times is working on a new kind of offer: if you want to try the FT, you can subscribe for one month, for 1 euro and then, if you re convinced with the quality, you will subscribe for the year, at a normal rate. The Washnington Post is going the same way with an offer of 19.99 dollars for the first year.

The FT considers that it is important to keep a readership  for the full publication and not for scattered articles you can also get on Twitter or Facebook. It is an intersting effort to justify the existence of a proper media, with its various chronicles while the users tend to pick up pieces of news all over the Web. The last figures show that the FT strategy works but one must never forget that people are willing to pay only for top quality. The news digital services are under tough darwinian laws.

Friday, September 11, 2015

digital news the challenge of delivery

The digital revolution moves so quickly that it is sometime difficult to assess the new trends.

Still one thing is getting obvious: the news websites depend more and more on the social media. This unexpected change forces powerful newspapers like the New York Times to reorganize completely their delivery policy.

What happens is that the way people in the US and in Europe consume news is chnaging dramatically. Now, close to 50% of the users rely on mobiles and mostly smartphones, much more popular than the tablets.

Also about half of the readership comes from the social media and usually, Facebook. The homepage of newspapers websites is not popular anymore. So, it was not a big surprise to see the NYT strike a deal with Facebook for an Instant article delivery. Many American and British publications are following.

In France, the same process is coming with Les Echos as a pioneer but many others willing to go for it to save their readership.

A big question is whether Facebook and some others will gain a kind of control of the medias. Will they practice some censorship on pieces of news they won't like? We 'll go back soon to this very crucial matter.

Wednesday, August 12, 2015

The fragile model of the New York Times

Ken Doctor is one of the best American experts on newspapers. In his last blog, he comments the figures of the New York Times  for the first half of 2015. They are both a source of comfort and worry. True, the Gray Lady has reached the impressive figure of 1 million digital subscribers, including 1000000 from non US countries. True also, these subscriptions bring 185 millions dollars a year, a figure close to the cost of the newsroom which amounts to 200 millions.

However, it could be too late, too little. Print advertising keeps going down at a frightening speed: minus 12.8% for the second quarter. The digital ads went up by 14.2 but the global figure is still -5.5.
The print circulation keeps going down too. 10 years ago, the print sales were 1.5 million. Today, they are 650000. Admitedly, if you add up the million digital subscribers, you get the same global number as 10 years ago but the daily is far less profitable.

One of the main reasons for this fall of net income is that digital publication has a heavy cost. The NYT must hire a growing population of computer and Internet experts and lauch new experiments that are expensive and not always successful like NYT Now. Moreover, the potential for new subscribers is limited, unless the Gray Lady chases more foreign customers, a process which is not cheap either.

The lesson one can draw is that quality and good journalism have a cost but it pays with always reluctant subscribers  and also, one must rely more and more on digital tools which are hard to find and very, very expensive. Still for the main Western newspapers, there is no choice. They must move on or be irrelevant and disappear.

Friday, July 31, 2015

Drahi's media Empire.Too big to win

In hardly 18 months, Patrick Drahi, the French-Israelian tycoon who built a powerful telecom business and started an international Israeli TV channel, has collected a large media group in France. He started with the daily Libération, then, he bought Express group, including the newsmagazine Express, and the successful monthly l'Etudiant. He announced on July 28, a partnership with another tycoon, Alain Weill owner of the all news BFMTV and the prosperous radio RMC. Thanks to this union the two ambitous managers will be present in print, television, radio and, of course, the Web.

Many observers wonder. Drahi has heavily borrowed to buy the cable network Numericable and the huge telecom operator, SFR. He has also acquired a huge cable company in the US. His debts amount to about 30 billions dollar while his net income is probably lower than 1 billion.

For the moment interst rates are very low and investment funds are desperately looking for ways to use their abundant liquidities. But is is it going to last? Nobody a bit serious can believe that.

In things turn to the worse, the hardly profitable media group won't be a very attractive prey to avid creditors. If something is obvious, it is that Drahi and his team have no strategy to improve an ailing industry. Express is downspiralling in sales and advertising, Libération has no future and BFMV has to fight in the very crowded field of all news channels and dynamic social networks that belong to American investors with deep pockets. for the moment the group executives buy out their best journalists and talk about new acquisitions.

So Is Mr Drahi to follow the sad exemple of Jean Marie Messier the powerful media mogul who fell in the trap and vanished from the scene? Lets wait until...2016.

Monday, July 20, 2015

Schibsted digital strategy

Most observers agree on the fact that the Norwegian media group Schibsted  has followed these last 20 years an efficient and clever strategy. The result can be read today. The Norwegians are one of the most profitable and promising groups in Europe.

While they kept their various newspapers in Norway and Sweden, in spite of the fact they keep losing readership and advertising, they started very early to develop a huge and proseperous activity in classified ads on the web. Their flagship company which is in France, Leboncoin, turns up more than 30% of the total income of the group and they have launched classified ads branches in 24 countries. At the same time, they have given up their investments in 20 Minutes, a free sheet that never made it in France and Spain.

Now, it appears that the future of Schibsted lies with a world network of digital ads while their news activities are slowly falling into obsolescence.

if you look at another very successful media operator, the German Springer, you see the same process. Springer keeps its old newspapers, Bild which has still a circulation of 2 millions copies and the more high brow Die Welt. However, its digital department with prosperous websites on housing, wemen and classifieds is turning over most of the income. In a few years , Springer executives will have to find a solution for their ailing dailies and maybe build up a digital only news service which will be good for their image if not for their finance.

Now we wait for the second quaterly results of the New York Times, a news only company which is still fighting a uphill battle.

Friday, July 3, 2015

the uncertain future of legacy media

The most recent trends of the digital revolutions are no comfort for the embattled legacy media.

What do we see?

A continuing decrease of advertising confirmed by the first quarter figures of the New York Times and the results of the French newspapers. Advertising is going down by 7% a year and aims directly at the bottom.

A parallel fall of paper circulation, by 2 or 3% a year which seems also an endless process.

A stabilization of the digital subscribers Which is very worrying for the NYT as they cannot expect to raise their digital subscription rates in a very competitive market.

Close to 50% of users that rely on smartphones as the hopes on the tablets have not been fulfilled by far.

The growing power of the social networks and mainly Facebook which are more and more the conduit for news. is appears that the main world newspapers will have to rely on the Facebook delivery system to keep working.

Lets hope for the best.

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.