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.